CoinFlex announced a restructuring plan wherein creditors will own 65% of the company. The voting on this proposal will take place over the next week.
Earlier in June, CoinFlex halted withdrawals after Roger Ver failed to repay a $47M debt.
The firm has now submitted a proposal to allow its Creditors (called the "Ad Hoc group" in the term sheet) to own 65% of CoinFlex. 15% of the company's share will be allotted to the CoinFlex team in the form of an Employee Option Share Plan (EOSP) over time.
CoinFlex has also reached an agreement with SmartBCH Alliance. The latter will assume responsibility for the SmartBCH Bridge. It will also use its BCH assets to exchange the sBCH tokens held by its users on a 1:1 basis.
Additionally, the term sheet states all shareholders will gain recovery tokens (rvUSD), equity, and USDC. CoinFlex will not distribute the FLEX tokens as it may use them for marketing purposes.
However, CoinFlex’s Ordinary and Series A shareholders will lose their equity stakes if the proposal gets accepted. Meanwhile, Series B investors and the Ad Hoc group will maintain their positions as the crypto exchange's shareholders.
According to the blog post on CoinFlex,
"As with any reorganization, unfortunately, most shareholders get wiped out. This situation is no different; with all existing Ordinary and Series A shareholders of the Company losing their equity stakes, including us."
The voting on the proposal is scheduled for September 25. CoinFlex will present the proposal to the Seychelles court to approve its reorganization if over 75% of the creditors vote in favor of the proposal. The firm estimates its restructuring process to wrap up within six weeks.
