FTX Resumes Payments to Employees And Contractors Pending Bankruptcy Hearings
FTX has resumed post-bankruptcy payments to employees worldwide days after they were halted following a chapter 11 bankruptcy filing in the US.
According to a November 28 announcement, the exchange would also resume “ordinary course payments to certain non-U.S. contractors and service providers.” The exchange further clarified that the payments would be made in cash, taking into consideration the pre-petition and post-petition periods and subject to the conditions of the Bankruptcy court.
The announcement added that the reliefs were only applicable to employees outside of FTX Bahamas and FTX Australia. Notably, separate bankruptcy proceedings have been filed in those jurisdictions and are not included in, or protected by, the chapter 11 cases in the United States.
“With the Court’s approval of our First Day motions and the work being done on global cash management, I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits,” said John J. Ray III said FTX’s new CEO. “We recognize the hardship imposed by the temporary interruption in these payments and thank all of our valuable employees and partners for their support.”
Monday’s notice comes after the exchange launched a strategic review of its global assets to maximize recoverable value for stakeholders on November 19. At the time, Mr Ray noted that FTX debtors had filed various motions with the Bankruptcy Court seeking interim relief from the Court that, if granted, would “allow the operation of a new global cash management system and the ordinary course payment of critical vendors and vendors at foreign subsidiaries”.
He also asked all FTX employees and vendors to be patient as he made arrangements that corporate governance failures at FTX had prevented them from putting in place before filing the chapter 11 cases. On Tuesday, November 22, 2022, FTX was granted interim and final approvals for all of the “First Day” motions related to the FTX Debtors’ Chapter 11 petitions enabling it to proceed with normal business operations, including disbursing payments.
Following its filing for bankruptcy protection in the US earlier this month, FTX has been trying to get back on its feet even as the broader crypto market continues to reel from its sudden collapse. Recently, the exchange disclosed that it had begun receiving interest from potential buyers for its assets, adding that it was willing to conduct an orderly process to reorganize or sell FTX assets around the world for the benefit of stakeholders.