FTX, which declared bankruptcy in November 2022, has presented a new reorganisation plan to its creditors.

The proposed plan aims to provide a significant portion of its creditors with their entire or partial claims in cash within 60 days of acquiring court approval.

The plan is currently awaiting approval from the Delaware bankruptcy court. Under the proposed plan, FTX would pay back 98% of its creditors in cash, while non-governmental creditors could obtain up to 9% interest to compensate for the time value of their investments.

The proposed payouts are substantially higher than earlier estimates by the FTX estate, which had estimated that it would only pay back 90% of customer funds.

However, in January 2023, John Jay Ray III, the current CEO of FTX, revised the estimate and informed the court that he expects to pay customers back in full.

The FTX estate has denied that the market recovery is the driving force behind its massive pile of cash. The estate has managed to collect the company’s dispersed assets worldwide and liquidate them to generate cash to pay back the claims.

The estate is projected to have between $14.5 and $16.3 billion in cash available for distribution when the Delaware bankruptcy court approves the plan.

The proposed plan would also settle claims from regulators and government agencies, including the Internal Revenue Service and the U.S. Commodity Futures Trading Commission (CFTC).

The IRS has agreed to resolve its $24 billion in claims by accepting a $200 million cash payment and a $685 million subordinated claim that would only be paid out after all creditors and other governmental entities.

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The CFTC and other unnamed governmental claimants have agreed to subordinate their claims as long as FTX users and investors are paid in full with interest.

In addition, a special fund is being created to provide supplemental compensation to certain customers and creditors. However, the details of this agreement have not yet been finalised, according to the press release.

The proposed plan is scheduled for a hearing in June, where its feasibility will be discussed with the creditors.