FTX has just announced it is “resuming ordinary” payments to its remaining employees worldwide, including salary and benefits. The move is the latest in a bid to keep its head above water by reassuring some subsidiaries and staff.
Working through bankruptcy
The company’s announcement comes about ten days after it filed a motion in the bankruptcy court in Delaware. It stated that it would pay its contractors and employees benefits and compensation. However, it excluded former CEO Sam Bankman-Fried, Caroline Ellison, Gary Wang, and Nishad Singh.
John Ray III, the new FTX CEO, is looking to assist FTX and its approximately 101 affiliated companies (FTX Debtors) work their way through the bankruptcy court.
“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,” he added.
Notably, the cash payments will be made per the orders of the Bankruptcy Court and will be subject to the limitations set by the court. The FTX group will also make regular payments to its service providers and vendors on or after the filing of its Chapter 11 case.
Based on the announcement, the company’s remaining workers and contractors will receive nearly three weeks of pay.
Ray acknowledged the hardship that the FTX employees and contractors experienced due to the payment delay. He also thanked all of the company’s partners and employees for their support.
Wait, there are exclusions?
Although the payments will continue to the FTX Debtors, they will not be able to apply to all of the company’s subsidiaries and related entities. In the Bahamas, the exchange’s location, only the contractors and employees of the company will be able to receive relief, not those who worked for FTX Digital Markets. Notably, it is subject to a different liquidation proceeding in the Bahamas.
That’s just one. The relief will also not apply to employees and contractors of FTX Australia and its subsidiary, FTX Express. These entities are also subject to separate Australian proceedings.
The case is not winding down any time soon
On November 22, FTX Trading announced that it had received final and interim approval for its various First Day motions. These motions related to the company’s bankruptcy filing on November 11.
At the time, Ray said that he expected granting the various motions to expedite the company’s efforts to reimburse its creditors and other stakeholders. He also noted that the company’s new CEO had indicated that a potential acquisition of the assets of FTX could benefit its stakeholders.
However, some insolvency lawyers noted that the process could take years or even decades to resolve the various issues related to the company’s bankruptcy.