According to court documents filed on Thursday, FTX, which is presently going through bankruptcy procedures in the United States, wants to keep its Dubai division out of the liquidation, media reports said.
So far, FTX has filed for Chapter 11 protection for 102 affiliated companies and organisations throughout the world. This number includes FTX Dubai, which was founded in February 2022 and is wholly owned by the European branch of the corporation.
However, the bankrupt estate argues that FTX Dubai’s prospects of rehabilitation are low since the company did not conduct any commercial activity prior to filing for bankruptcy in the United Arab Emirates (UAE). The estate claims that FTX Dubai is balance sheet solvent, making a voluntary liquidation in conformity with UAE regulations a more viable choice. After paying off all debts and selling off all assets, positive cash balances might be distributed on time using this method.
However, the estate makes clear that any court orders regarding FTX Dubai that were issued while the company was a party to the proceedings shall be honored notwithstanding the dismissal motion. The dismissal is being sought to safeguard the creditors and provide them permission to perform responsibilities such making pre-bankruptcy wage, salary, and benefit payments to workers in Dubai.
The court is scheduled to hear the cryptocurrency exchange’s arguments in this case on August 23. The hearing’s conclusion may have far-reaching consequences for FTX and its affiliated businesses’ wind-down and asset distribution.
In the midst of a high-stakes, multi-entity worldwide bankruptcy action, FTX has decided to cut off its Dubai branch. The decision to go forward with a solvent voluntary liquidation in the UAE is motivated by a desire to reduce red tape and speed up the settlement process for all parties.
