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FTX Cleared to Sell LedgerX, Japanese Units by Bankruptcy Judge
The collapsed exchange is looking to sell off its more separable and solvent assets as it seeks to repay creditors.
Updated Jan 13, 2023, 3:48 p.m. Published Jan 13, 2023, 6:38 a.m.
FTX can put four key units including derivatives arm LedgerX and stock-clearing platform Embed up for sale, a Delaware bankruptcy judge ruled Thursday.
Investment bank Perella Weinberg is now allowed to start the sale process, which also includes the crypto exchange’s European and Japanese units, and which have already attracted as many as 117 expressions of interest.
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In formal terms, the judicial decision allows bids, an auction, and a sales hearing to take place, with permission for any actual transaction to come later. Judge John Dorsey of the Delaware Bankruptcy Court, charged with overseeing the wind-up of the exchange, approved the measures in an order dated Thursday after a hearing held Wednesday. Sale notices will be published within around three business days, with indications of interest to be received between Jan. 18 for Embed and Feb. 1 for FTX Europe and Japan.
During Wednesday's hearing, Dorsey characterized the process as FTX "trying to dip their toe into the water to see what happens [and] see what kind of interest they receive."
Sam Bankman-Fried’s crypto enterprise filed for bankruptcy on Nov. 11, 2022, shortly after a CoinDesk report scrutinized the integrity of FTX trading arm Alameda Research’s balance sheet.
Claims linked to former senior executives and their families will be excluded from the sale, given concerns from the Department of Justice about sales where there have been serious allegations of wrongdoing. Bankman-Fried has pleaded not guilty to charges including wire fraud while serving as chief executive officer, while his former lieutenants Caroline Ellison and Gary Wang are said to be cooperating with investigators.
The estate, now run by restructuring expert John Ray, hopes to generate more value for creditors by speedily selling off the more solvent and easy-to-separate arms of the business.
Read more: Around 117 Parties Interested in Buying FTX Units, Court Documents Show
UPDATE (Jan. 13, 10:49 UTC): Clarifies the judge's ruling allows the sales procedure to begin, and adds Judge John Dorsey's comment in fourth paragraph.
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