FTX Trading receives court approval of settlement with Modulo

By Sarah Lizee

Olympia, Wash., April 10 – FTX Trading Ltd. received approval of a settlement with investment adviser Modulo Capital, Inc. that could bring in $460 million to the debtors’ estates, including more than $404 million in cash, according to an order filed Monday with the U.S. Bankruptcy Court for the Southern District of Delaware.

This settlement relates to the transfer of $475 million by the Alameda debtors, as directed by former chief executive officer Samuel Bankman-Fried, to the Modulo entities between May 2022 and November 2022 for investments and to support the Modulo entities’ operations.

The FTX debtors believe they have valid claims to avoid and recover the transfers, and Modulo disputes this. FTX said the settlement will resolve the debtors’ claims against the Modulo entities and deliver the significant recovery while avoiding the expense and burden of litigation.

“The debtors’ entry into the agreement is in the best interests of their estates, creditors and stakeholders, and should be swiftly consummated,” FTX had said in the motion.

“The agreement’s terms will provide the debtors’ estates significant value representing 99% of the Modulo entities’ remaining assets and 97% of the original transfers from the Alameda debtors to the Modulo entities, after considering expenses and trading losses.”

FTX has headquarters in the Bahamas. The company filed Chapter 11 bankruptcy on Nov. 11 under case number 22-11068.

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