According to court filings dated February 9, 2024, FTX Trading Ltd. and its associates have declared their intention to sell Coinlist the subsidiary that they purchased for $10 million for $500,000. The most recent motion, which was submitted to the United States Bankruptcy Court for the District of Delaware, describes the planned sale in detail with the goal of optimizing the estate’s value for stakeholders and creditors.
Court Document Reveals Bankrupt FTX’s Intent to Sell Digital Custody Inc. Subsidiary
The now-defunct cryptocurrency exchange FTX, which is being run by John Ray III, the company’s new CEO and chief restructuring officer, plans to sell a subsidiary that it paid $10 million to buy in bankruptcy. In order to sell their stake in Digital Custody Inc. (DCI) to Amalgamated Token Services Inc. (Coinlist) for $500,000, the debtors are requesting permission from the court.
The court petition states, “Due to the acquisition’s timing, DCI was never incorporated into FTX US or Ledgerx’s operations before the start of these Chapter 11 Cases. As these Chapter 11 Cases got underway, the debtors liquidated their stake in Ledgerx in May 2023. Additionally, the Debtors have never reopened or sold the FTX US exchange. Despite having a small number of locations, DCI still owns a lucrative franchise.
Lawyers for the bankrupt entity also add:
Given that the debtors sold Ledgerx and that it is unlikely that they will sell or relaunch FTX US, DCI is thus no longer beneficial to the debtors’ company.
In addition to outlining the legal and procedural requirements for the proposed sale, the court filing highlights the sale’s good commercial rationale and aims to maximize the estate’s value for creditors and stakeholders. According to the petition, “the debtors designed a process to market the interests in an efficient and competitive sales process with the assistance of their financial advisor, Alvarez & Marsal North America, LLC.” “Part of these efforts involved compiling and contacting a confidential list of possible buyers for the interests.”
In its request for the transaction’s approval, the document highlights how important the transaction is to the financial recovery and reorganization of FTX Trading Ltd. and its affiliates. The sale of these assets is portrayed as a well-thought-out plan to benefit creditors. The FTX estate’s plan to sell its estimated $1.4 billion stake in Anthropic is consistent with the announcement to divest DCI.
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