The FTX debtors' plan to set aside up to $230 million from government forfeiture proceedings for preferred shareholders, revealed after the August 16 creditor vote, has sparked outrage among creditors. This provision, disclosed on September 27, allocates 18% of forfeiture proceeds to a special fund for shareholders, despite creditors traditionally being reimbursed first in bankruptcy cases. Creditors, who had no input on this decision, feel shortchanged, as their claims were based on the lower value of cryptocurrencies at FTX's collapse, leading to significantly smaller cash recoveries. The plan’s confirmation hearing is set for October 7, with mounting criticism from creditors who argue that the estate is favoring shareholders. Source: The Block