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FTX: New management seeks Court approval to auction functioning branches

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On Thursday, the now-insolvent cryptocurrency exchange FTX asked a federal court for authorization to sell a number of its subsidiaries, including the LedgerX derivatives arm based in the United States.

 

Attorneys for FTX stated in a document submitted to the Bankruptcy Court of Delaware that it is the priority of the company’s current management to “explore” the sale or find other strategic transactions for a few of their subsidiaries. 

 

The filing further stated that “based on their preliminary review, the Debtors own or control several subsidiaries and assets that are regulated, licensed and/or largely not integrated into the Debtors’ operations, within and outside of the United States.” It further disclosed that some of these Debtors believe that some of these subsidiaries have ”solvent balance sheets, independent management, and valuable franchises.”

 

One of these subsidiaries is LedgerX, which also operates as FTX US Derivatives, FTX Japan, FTX Europe, and Embed Business.

 

Since FTX very recently bought most of these companies, they mostly ran independently of their parent company on a global scale. As a result, in contrast to some of the company’s other subsidiaries, their assets and finances remain separate from FTX.

 

The filing further revealed that FTX wishes to sell these entities quickly, as many of them have had their operating licenses suspended after FTX filed for bankruptcy. 

 

Stating one of the reasons these entities want to be sold, the court filing stated that the longer these entities are suspended, the higher the chances of them getting a permanent revocation of their license and the greater the risk to the value of the assets. The suspension of these licenses cannot be lifted while these entities are still operating under FTX. Hence the urge to sell.

 

FTX receives bids  

 

More than 100 unsolicited bids for the companies have already been submitted to FTX, according to the court document. The document explained that if the sales are allowed, interested parties could submit bids for the various units with potential deadlines for the various organizations ranging from February to March. Dates for preliminary bids range from the middle of January through early February.

 

Aspiring buyers are required to submit various documentation on or before these dates attesting to their interest in and capacity to bid on the firms at auction. Bidders must also be able to prove their capacity to obtain regulatory permission for the sales.

 

Citing the benefits of the sales to FTX ‘s creditors, the filing revealed: “a sound business purpose for the sale of a debtor’s assets outside the ordinary course of business exists where such sale is necessary to maximize and preserve the value of the estate for the benefit of creditors and interest holders.”

 

FTX would ask for hearings before the bankruptcy court in March if a potential bidder could get past these hurdles.

 

Read Also:

FTX: SBF snitched by one of his closest FTX associates

Australia to launch new crypto and tokenization framework in 2023

 

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