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On Friday, March 17th, FTX filed a presentation for the Official Committee of Unsecured creditors detailing the company’s balance sheet at the time of bankruptcy. The document, available on the website of the restructuring advisor Kroll under the number 1101, revealed that the company had a hole worth nearly $7 billion on November 11th.
At the Time of Bankruptcy, FTX’s Debts Were Over $11 Billion
A filing made on March 17th reveals that on November 11th, when the company filed for bankruptcy, FTX had only about $4.8 billion worth of assets and $11.6 billion worth of liabilities. The liabilities mostly consisted of funds owed to customers. Furthermore, FTX.US, which Sam Bankman-Fried claimed was fully solvent on multiple occasions, had a shortfall of around $87 million.
The presentation, however, highlights that the numbers are unaudited and therefore subject to errors. Locating and securing FTX Group’s funds has proven to be a significant challenge so far. Soon after the company went bankrupt, the current management headed by John J. Ray III, hired a group of forensic investigators to help find the missing money, and the new CEO stated that the company had “near zero” record-keeping practices in place.
Since the start of the year, FTX offered two updates. The first release called the effort to recover funds a “Herculean Task” and stated that despite the work, there are still significant shortfalls. The second document similarly offered little cause for optimism as it again stated that, despite the efforts, the FTX Group still has a “massive shortfall”.
SBF Wants $5 Million For Lawyers, Restructuring Team Charges $38M For January, and Alameda Sues Grayscale for 9B
While the struggle to make FTX’s customers whole appears very far from over, multiple parties are making their demands on the collapsed company. The bankruptcy costs are, for example, proving to be quite high as recent reports indicated that the restructuring team charged around $38 million for the month of January—on top of nearly the nearly $20 million charged by the end of 2022.
As part of its work, FTX’s restructuring team also recently made a move to try and secure “at least $9 billion” for one of its entities—Alameda Research. A lawsuit, announced on March 6th, alleged that Grayscale is guilty of charging exorbitant fees and unjustly profiting from them, as well as of preventing withdrawals without proper cause. Grayscale called the complaint “misguided”.
Sam Bankman-Fried, who both helped found FTX and drove it into the ground, is also now seeking financial aid from the company. Earlier this week, the former CEO filed a request to receive up to $5 million from the firm’s D&O insurance to help cover his legal bills. Another recent filing revealed that the FTX Group transferred more than $2 billion to SBF and another $800 million to the company’s other executives prior to its collapse.