FTX: Inside the Restructuring - [Business Breakdowns, EP.153]

This is Matt Reustle. Today we are releasing a bonus episode of Breakdowns. While we typically love to cover businesses, this was an interesting opportunity to cover a special situation around a business. And in this case, the FTX bankruptcy. I was joined by Erin Broderick, Head of U.S. Cross-Border Restructuring & Insolvency at Eversheds Sutherland. Erin represents the Ad Hoc Committee of Non-U.S. customers for FTX, giving her a front-row and hands-on seat to everything that's unfolded at FTX since they entered Chapter 11 in November of 2022. We cover the basics around bankruptcy proceedings, using FTX as a lens in comparison to other restructurings. Please enjoy this bankruptcy breakdown on FTX. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.com/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Show Notes (00:00:00) Welcome to Business Breakdowns (00:03:31) First Question - Understanding Bankruptcy Proceedings (00:04:15) The FTX Bankruptcy Case (00:05:19) The Role of Chapter 11 and Chapter 7 in Bankruptcy (00:05:52) The Challenges of Restructuring FTX (00:08:18) The Role of Customers in the FTX Case (00:12:16) Complexities of Tracing and Identifying Assets (00:22:10) The Role of Secondary Hedge Funds (00:27:05) The Issue of Dollarization of Claims (00:32:35) The Process of Uncovering Assets (00:36:39) Proposed Recovery Plan for FTX (00:45:21) Upcoming Timeline For FTX To Exit Bankruptcy