In FTX bankruptcy case, Miami-Dade sees little hope. Will take pennies on the dollar
Miami-Dade County claims the bankrupt FTX crypto exchange owes taxpayers $17 million under its canceled naming-rights agreement for the Miami Heat arena, but that bill will likely remain mostly unpaid.
On Tuesday, county commissioners agreed to sell the claim for 30 cents on the dollar to any investors willing to pursue more money from FTX in federal bankruptcy court.
“I’ve never worked on a bankruptcy case that got better. It always gets worse,” said Commissioner Raquel Regalado, a lawyer who now works as a broadcaster. “The idea of just getting out as early as possible seems like a great idea to me. “
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The administration of Mayor Daniella Levine Cava, which negotiated the 2021 deal with FTX before the company collapsed amid criminal allegations of fraud, presented the proposal to sell the county’s bankruptcy claims.
The agreement would give Miami-Dade a minimum of $5 million if a claims speculator agreed to the 70% discount on what Miami-Dade says it’s owed from the original $135 million FTX contract.
The deal included a provision that FTX must pay three more years of naming-rights fees if it defaults on the agreement, and Miami-Dade claims the fraud charges against ex-CEO Sam Bankman-Fried constituted a breach.
If a judge finds the claim valid, Miami-Dade would then be competing with other creditors for a share of FTX’s remaining cash for a payout. Under the arrangement approved by commissioners, Miami-Dade gets a one-time payment and the claims buyer keeps whatever the court awards to the county.
Should a judge reject Miami-Dade’s claim, the county would need to return the payment to the purchaser. The 30% portion commissioners approved is the minimum a broker could accept from a buyer, but it could go higher.
Selling the claim allows Miami-Dade to withdraw its lawyers from the FTX case being heard in New York. Last month, commissioners approved the Miami software firm Kaseya as the new sponsor of the county-owned arena.
“I personally would like FTX and all their shenanigans out of our lives,” said Commissioner Eileen Higgins.