Bankrupt exchange FTX has just announced that it will restore cash payments, salaries and benefits to its remaining employees around the world.
The announcement came from FTX’s new CEO John Ray III on Nov. 28, as the expert on dealing with multiple insolvent companies looks set to help FTX and those who suffered losses get through the crisis.
John Ray III said:
“With the Court’s approval and the work being done on global cash management, I am pleased to announce that FTX is resuming wage payments and cash benefits to the rest of our employees around the world.
FTX is also making cash payments to selected suppliers and service providers outside the U.S. as necessary to maintain business operations, subject to limits approved by the Bankruptcy Court.”
The announcement comes about 10 days after FTX’s creditors filed a claim to pay compensation and benefits ahead of time to employees and service providers in Delaware County bankruptcy court on Nov. 19, excluding payments to former FTX CEO and founder Sam Bankman-Fried. along with Gary Wang, Nishad Singh, and Caroline Ellison.
Sharing our press release just issued: FTX Resumes Ordinary Course Payments of Employees and Certain Foreign Contractors https://t.co/8CDnlsvu2j
— FTX (@FTX_Official) November 28, 2022
This means the remaining FTX employees and service providers will receive nearly three weeks of pay, which was presumably halted after the company filed for bankruptcy on Nov. 11. Besides, Mr. John Ray III acknowledged the financial difficulties for those who suffered losses due to FTX late payment.
“We recognize the many challenges posed by the temporary disruption in these payments and thank all of our valued employees and partners for their support.”
The bailout will include cash payments to workers at FTX Trading and 101 other affiliated companies, in addition to many service providers that still need to be paid by FTX. However, the resumption of payment will not apply to all related subsidiaries and organizations of FTX.
The new FTX CEO also said he expects these actions to accelerate FTX’s efforts to refund funds to other stakeholders affected by the exchange’s collapse, such as FTX users and creditors.
In addition, John Ray III hinted at the possibility that FTX’s asset acquisition could benefit stakeholders sooner. However, some bankruptcy lawyers are of the view that the process could take years, even decades, due to the complexity and scope of the FTX’s demise. Because FTX Trading alone owes its top 50 creditors $3.1 billion.