FTX’s GoldWynn condos to be ‘absorbed at market value’


Tribune Business Reporter


THE eight GoldWynn condo units newly-acquired by FTX’s Bahamian liquidators will be “readily absorbed by the market” when put up for sale, the project’s developer predicted yesterday.

Randy Hart, the Wynn Group’s vice-president, told Tribune Business that: “They [the liquidators] said they will go and liquidate them. We’re pretty much sold out anyway, and I think they will be readily absorbed in the market and for market value. I don’t see where this will be prejudicial to our interests.”

He was responding to Tribune Business’ report that the liquidators for the crypto exchange’s Bahamian subsidiary, FTX Digital Markets, prevented a near-$8m loss by completing the acquisition of the eight units in the Goodman’s Bay development.

The closing of these transactions, which the Bahamian liquidators will now also seek Supreme Court approval for, means all eight condos will be included among the properties they will seek to sell under the terms of their deal with John Ray, head of the 134 FTX entities in

Chapter 11 bankruptcy protection in Delaware.

Mr Hart added of the liquidators: “They’ve informed me that they don’t have any interest in having the units leased out or on rental, so that means there will just be fewer units available for rental in the building, which will be beneficial to the other owners who want to rent theirs out. So there will be fewer units available, at least in the short-term anyway.

“The whole time they [FTX] were buying units and now they’ve closed on them, so it doesn’t really impact us in a meaningful way. Our building is basically sold out. So whatever the inventory of units they have, they will liquidate them in due course at fair market value and, accord- ing to what I have read, they have to go through quite a procedure to sell them to make sure that the prices, pricing is fair. So there won’t be any big deals.”

Brian Simms KC, the Lennox Paton senior partner, in a January 12, 2024, affidavit supporting the bid for Supreme Court approval of the settlement with Mr Ray, revealed that failing to close purchases agreed prior to the crypto exchange’s November 2022 implosion would have cost FTX creditors and investors some $7.718m.

The proceeds from reselling the condo will now be used to reimburse victims of the crypto exchange’s collapse, and Mr Simms voiced optimism that FTX Digital Markets’ claim for $256m against a total 41 Bahamian properties “will be satisfied to a great extent” from these disposals. Mr Ray had previously suggested that the sell-off “will not be sufficient” to satisfy the Bahamian subsidiary’s demands.

Meanwhile, Mr Simms revealed that he and PricewaterhouseCoopers (PwC) accounting duo, Kevin Cambridge and Peter Greaves, have “indemnified” Wynn Development, as GoldWynn’s developer, against any costs or dam- ages it may incur should a former FTX Digital Markets executive seek to challenge the seizure and sale of one particular condo whose purchase was put in their personal name.

The Lennox Paton senior partner disclosed that the Bahamian liquidator trio acted after Wynn Development’s attorney, Alistair Chisnell of Graham, Thompson & Company, served them on December 5, 2023, with a “notice to complete” the eight condo transactions for which sales agreements were signed on February 22, 2022, and March 4 2022.

Seven units were to be acquired by FTX Property Holdings (PropCo), the vehicle used by the crypto exchange to make its Bahamian real estate buys, with the remaining condo’s purchaser named as Weiyi Xia, an FTX Digital Markets employee.

Deposits and stage payments, ranging from $507,168 to $1.305m, had been made on all eight condos when the “notice to complete” was served, and failing to close would have placed this collective near-$8m sum in jeopardy of being lost as a recovery source for FTX creditors and investors.

“The joint official liquidators and debtors [Mr Ray] were keen to avoid the forfeiture of the sums paid towards the purchase of the units - the sum of $7.718m,” Mr Simms said. To close the deals, FTX Digital Markets and FTX Property Holdings agreed a deed of assignment on December 19, 2023, whereby the latter - which is under Mr Ray’s control - assigned all the sales agreements to the Bahamian subsidiary.

It was thus FTX Digital Markets that completed the GoldWynn purchases, and Mr Simms added: “The PropCo GoldWynn units have since been conveyed to FTX Digital Markets, which FTX Digital Markets acting through the joint official liquidators holds in accordance with the deed of assignment and declaration of trust dated December 19, 2023.”

This will allow the Bahamian liquidators and their agents to sell the Gold- Wynn units under the terms of the agreement struck with Mr Ray that now awaits approval from both the Supreme Court and Delaware Bankruptcy Court. A separate approval will also be sought from the Supreme Court for the GoldWynn transactions, with hearings on these matters likely to take place next week.

As for the unit that was to be acquired by Weiyi Xia, Mr Simms asserted there was evidence that the $1.1m deposit and stage payments were paid by FTX Digital Markets and thus should be recovered by the latter for the benefit of creditors and investors. However, Wynn Development had sought protection against any legal claim by the former FTX employee.

“It was necessary for FTX Digital Markets to execute the indemnity agreement as a condition of Wynn Development completing the sale of the Xia GoldWynn unit,” Mr Simms explained. “Wynn Development wished to be indemnified from any adverse costs, damages or expenses that may be incurred in the

event that proceedings are commenced by Weiyi Xia as a result of the sale and purchase and completion of the GoldWynn unit to FTX Digital Markets.

“In summary, the joint official liquidators caused FTX Digital Markets to execute the indemnity agreement on the basis that, among other things, FTX Digital Markets may have a proprietary traceable interest in the Xia GoldWynn unit in that FTX Digital Markets made payments on behalf of Weiyi Xia in the amount of $1.1m to Wynn Development.

“The books and records of FTX Digital Markets show that FTX Digital Markets provided the fund- ing for the installment payments for the Xia GoldWynn unit similar to the other properties purchased in The Bahamas by PropCo and/or other employees of FTX Digital Markets,” the Lennox Paton senior partner added.

“If Weiyi Xia does seek to challenge the conveyance to FTX Digital Markets of the Xia GoldWynn unit, FTX Digital Markets will wish to protect the funds paid by FTX Digital Markets and resist the challenge. If Wynn Development was drawn into the dispute, it wanted to make sure that it was indemnified for any costs.”


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