FTX recently submitted court filings to request the judge to omit its Dubai arm from its bankruptcy proceedings in the U.S. The filing pointed out that FTX Dubai did not conduct any business before the bankruptcy filing in the Emirates. Further adding weightage to the request, the firm’s lawyers contended,
“FTX Dubai is balance sheet solvent. Therefore, the Debtors believe that a solvent voluntary liquidation procedure in accordance with the laws of the United Arab Emirates would allow a timely distribution of the positive cash balance after payment of all outstanding liabilities and liquidation of all assets.”
FTX Dubai was a fairly new entity launched by the company. It was set up in February 2022, and it was owned by FTX’s European arm. When FTX filed for bankruptcy last year, it initiated Chapter 11 cases for a total of 102 associated firms. FTX Dubai was one among them.
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Excluding Dubai Unit is ‘Necessary’ to Protect Debtors
Lawyers argued that eliminating this entity from the proceedings was “necessary” to protect the debtors. Furthermore, it will also help in authorizing them to pay pre-bankruptcy wages and salaries and reimburse expense costs to employees from Dubai. The court hearing regarding this request has been slated for Aug. 23.
FTX recently confirmed its plan to re-launch the exchange. John J. Ray III, the Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors said that the goal is to achieve a ”consensual” plan and eventually emerge from bankruptcy. As reported recently, FTX’s re-organization plan proposed to turn international customers into owners of the exchange. Ray indicated that FTX was committed to working through matters in Q3 2023. Subsequently, in Q4, it will file an amended plan, along with other statements.
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