By George Ward
It’s been a long road for the bankrupt FTX, but the company’s $45M sale to Abu Dhabi’s investment arm, Sequoia, has been cleared. A Delaware bankruptcy judge approved the deal in a ruling that allowed the company to exit bankruptcy and move forward with its restructuring plan.
This ruling is a relief to FTX and its creditors, who have been in limbo since the company filed for bankruptcy protection last November. Another critical aspect of the sale was that Abu Dhabi’s investment arm agreed to delay FTX’s Divestment of Embed.
Court Grants $45 Million Sale Of FTX Assets To Abu Dhabi Investment Arm
A Delaware bankruptcy court judge granted permission for the $45 million sale of FTX’s possessions under the Sequoia Capital Fund to the Abu Dhabi investment arm, according to the document filed in court.
Judge John Dorsey affirmed that the sale of FTX’s assets to Al Nawwar Investments RSC Limited conformed with U.S. bankruptcy law. Earlier, the bankrupt company asked for an indefinite adjournment of the sale of its stock-clearing business Embed, initially planned to be a practical way to pay its creditors.
The hearing for Embed was initially slated for the 27th of February before it was postponed. It will remain on hold “until further notice,” according to a court document.
A New Dawn
FTX’s bankruptcy filing revealed that the company, which was previously worth $32 billion and had up to 1 million creditors, had amassed $8 billion of liabilities, which it could not pay. John J. Ray III, appointed as the new CEO of FTX by the court, stated that the exchange’s collapse resulted from “a total failure of corporate control.”
Ray, with a background of managing several bankrupt businesses, notably Enron, said in a hearing at the U.S. House of Representatives last December that there were “classic signs” of embezzlement in the FTX collapse. He further said those who invested or lent money to it would likely not get it all back.
The sale of FTX’s assets is a positive step forward for the company and its creditors. Abu Dhabi’s investment arm has made a significant investment in FTX and is committed to helping the company recover from bankruptcy.
The delay in the Divestment of Embed also allows the company to restructure and find a buyer, which could benefit the company in the long run. It’s been trying times for FTX, but the company is on the right track with this recent sale.