FTX creditors oppose reorganization plan, say cash payoff will lead to tax problems

FTX creditors, led by Sunil Kavuri, are leaning toward filing a lawsuit in court and a plan of reorganization by the FTX receivership. The creditors point out that the country adopted a conflict of interest and included provisions that were not in the interest of the estate and ignored property rights issues. Creditors stated that cash reimbursement would result in customers being required to pay taxes on the cash received, thereby avoiding additional burdens. Additionally, creditors suggested in rem reimbursement to avoid tax issues. In addition, the creditors requested that FTX update its settlement statement against the Internal Revenue Service (IRS). Under the settlement plan, the IRS will receive priority payments within 60 days of approval, with an additional 6.85 days of priority payments to be made upon full reimbursement by the customer.FTX's plan of reorganization includes payment of 118% to creditors with claims of $50,000, and interest reimbursement of up to 9% for other non-government creditors.