Beleaguered cryptocurrency exchange FTX and affiliated companies have announced the resumption of employee salary payments and benefits.
However, the payments will exclude former CEO Sam Bankman-Fried, and other senior executives, including Gary Want, Nishad Singh, and Caroline Ellison.
FTX Finally Resumes Salaries And Benefits
FTX’s new CEO, John Ray III, has announced that the bankrupt exchange will be resuming ordinary payments, salaries, and benefits to its remaining global employees. The announcement was made on the 28th of November as the seasoned insolvency specialist looks to help FTX and its affiliated companies through the bankruptcy proceedings. The new FTX CEO, in his announcement, stated,
“With the Court’s approval of our First Day motions and the work being done on global cash management, I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits to our remaining employees around the world. “FTX also is making cash payments to selected non-U.S. vendors and service providers where necessary to preserve business operations, subject to the limits approved by the Bankruptcy Court.”
The announcement by FTX comes after FTX debtors had filed a motion in the Delaware Bankruptcy Court on the 19th of November to pay pre-petition compensation and benefits to employees and contractors. However, the petition excluded payments to former CEO Sam Bankman-Fried, and executives Nishad Singh, Gary Wang, and Caroline Ellison.
Relief For Employees
The announcement is significant as it means the remaining employees and contractors will receive three weeks’ pay. The pay was halted after the exchange filed for bankruptcy on the 11th of November. The new CEO acknowledged the hardships imposed on the employees and contractors and thanked them for their patience and support.
“We recognize the hardship imposed by the temporary interruption in these payments and thank all of our valuable employees and partners for their support.”
The relief will consist of cash payments owed to employees and workers at FTX trading and around 101 affiliated trading companies since the bankruptcy filing. Additionally, it will also consist of payments to be made to vendors and service providers.
Others Still Await
The resumption of payments and salaries will only apply to some FTX subsidiaries and other related companies. In the Bahamas, only the employees of FTX Debtors will be eligible to receive any sort of relief. However, those employees working for FTX Digital Markets will not receive any for the moment. This is because FTX Digital Markets are subject to separate liquidation proceedings in the Bahamas, where the cryptocurrency exchange is headquartered.
The relief will also not apply to any Australia-based employees and contractors for FTX Australia and its subsidiary, FTX Express. Both are subject to separate bankruptcy proceedings ongoing in Australia.
Process Could Take Significant Time
FTX had announced on the 22nd of November that it had been granted interim and final approvals for all “First Day” motions related to its bankruptcy filings. After the announcement, the CEO stated that he hoped the motions would fast-track efforts to reimburse other stakeholders impacted by the collapse, such as users and creditors. The CEO also suggested a potential buyout of FTX assets could benefit stakeholders.
However, some insolvency lawyers have warned that the process could take years, given the sheer scale and complexity of FTX and its subsequent collapse. According to documents filed as part of its Chapter 11 bankruptcy proceedings, FTX Trading alone owes $3.1 billion to just its top 50 creditors.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: Crypto Daily