Lawyers who are currently representing FTX have been seeking permission from a U.S. bankruptcy court to sell off the Japanese and European branches of the firm, derivatives exchange LedgerX , and stock-clearing platform Embed.
In fact, the company’s new leadership has requested a federal bankruptcy judge to permit selling off parts of the failed crypto empire’s business early next year — while those subsidiaries of FTX still hold some value.
On behalf of the company, lawyers from the law firm Sullivan and Cromwell stated that the longer the operations are shut down, the greater will be the risk of the asset’s value and the risk of permanent cancellation of licenses.
FTX Japan is currently under a business suspension and improvement order, while FTX Europe has had its licenses and operations suspended. They also pointed towards customer and employee losses since FTX had filed for bankruptcy on Nov. 11, and strongly believe selling these businesses now will allow operations to resume and therefore maximize the value of the FTX estate.
The lawyers stated that these businesses were recently acquired and have been operating somewhat independently from FTX. According to them, this would make potential sale processes much less complicated.
Suggested dates for the bidding and sale approval process may vary by a subsidiary, but initial bids are due from mid-January to early February. On the other hand, final bids are due mid-February to mid-March, while auction dates run from late February to late March. Following these auctions, John Dorsey, presiding Judge of the US Bankruptcy Court for the District of Delaware, will hold a hearing dedicated to approving the winning bids.
Objections to the sale offers are due in December. 29, and a hearing on the matter is scheduled for Jan. 11. If only one eligible bid is placed on a business before the final bid deadline, FTX leadership proposes to cancel the auction and seek approval for that bid.
According to The Block, an entire list of dates follows. Notably, all these dates are in 2023. Preliminary bid deadlines are as follows
Embed, Jan. 18
LedgerX, Jan. 25
FTX Japan, Feb. 1
FTX Europe, Feb. 1
Final bid deadlines are as follows
Embed, Feb. 15
LedgerX, March 1
FTX Japan, March 15
FTX Europe, March 15
Auction dates are as follows
Embed, Feb. 21
LedgerX, March 7
FTX Japan, March 21
FTX Europe, March 21
Approval hearing dates are as follows:
Embed, Feb. 27
LedgerX, March 13
FTX Japan, March 27
FTX Europe, March 27
More than 110 parties are said to be interested in buying one or more of the 134 companies that are included in the bankruptcy proceedings. It’s worth mentioning that FTX has already entered into 26 confidentiality agreements with counterparties who are interested in the businesses or assets of FTX.
Commodity Futures Trading Commission Chairman Rostin Behnam noted that FTX is essentially “walled off” from other companies in the group and “holds more cash than anyone else.” Other FTX Debtor Entities Consolidate.”
To be specific, LedgerX is said to be a success during the bankruptcy proceedings of FTX, with Commodity Futures Trading Commission Chairman Rostin Behnam pointing out that the firm had basically been “walled off” from other companies within FTX Group, and had more cash than all the other FTX debtor entities combined.
FTX wants to sell off parts of its failed crypto empire before losing too much value or having its licenses permanently revoked. According to the firm, these sales would be in the best interests of all stakeholders.
It is important to note that this has been a famous way to sell bankrupt businesses over the past year, as FTX US has already won an auction to buy the assets of Canada’s Voyager Digital, a bankrupt digital assets lender, with a bid of just over $1.4bn.