Multiple Bid Proposals on the Table for FTX Debtors

In a recent courtroom hearing, Kevin Cofsky, a partner at investment bank Perella Weinberg Partners, revealed that debtors of the defunct FTX exchange are considering multiple proposals as a way forward, almost a year after filing for bankruptcy.

“We’ve been evaluating that process relative to the potential to reorganize the assets on a standalone basis,” Cofsky said at the hearing. This suggests that the team is considering alternatives to an outright sale, such as reviving FTX under new management or ownership.

The team tasked with restructuring and managing capital market opportunities for FTX Group has been actively engaging with potential buyers and partners. Their primary goal is either to acquire the legacy exchange assets or collaborate with the debtors in launching a revamped exchange.

Stalking Horse Bid on the Horizon

Cofsky added that a “stalking horse bid” for FTX’s assets would likely be announced on December 16th. A stalking horse bid refers to the initial offer made on the assets of a bankrupt company. This bid sets a baseline for other potential buyers to compete against. It’s a pivotal step in the bankruptcy process, signaling that FTX’s restructuring and sale are well underway.

Debate Over FTX’s Customer Information

One intriguing aspect of the ongoing FTX bankruptcy proceedings is the debate surrounding customer information. Before the recent hearing, FTX’s legal team argued that customer data holds significant value for the exchange’s future plans. This assertion, they argued, is supported by testimony from the Debtors’ investment banker.

According to the investment banker, the immediate release of the institutional customer names would be “value-destructive” and detrimental to efforts to monetize the exchange assets. Cofsky reiterated this stance, emphasizing the importance of the customer identities to the estate’s value. Meanwhile, the customer list remains sealed, despite calls for its release from some parties and media outlets.

Judge John Dorsey’s Perspective

Judge John Dorsey, presiding over the case, weighed in on the matter during the hearing. He recognized that at least three parties have expressed interest in purchasing FTX’s platform. Judge Dorsey acknowledged the pivotal role that customers play in the value of the exchange, saying, “Just as a matter of common sense, a platform without customers is nothing, so it has to have value.”