FTX defends transfer to nominate legislation agency Sullivan & Cromwell as advisor

by Jeremy

Bankrupt crypto trade FTX filed a Jan. 17 response — authored by Sullivan & Cromwell (S&C) attorneys — to the objections surrounding its retention of the legislation agency as an advisor.

FTX stated the legislation agency’s function on the bankrupt trade was of “essential significance,” citing how its info sharing with U.S. prosecutors and regulators led to the cost and arrest of Sam Bankman-Fried (SBF) and his accomplices.

In keeping with the submitting, claims that S&C’s earlier advisory function with the trade might result in a possible battle of curiosity had been false because it has carried out a conflicts examine process that confirmed it was a “disinterested particular person” within the case.

SBF beforehand accused the legislation agency of pressuring him to file for chapter due to the potential charges it stood to earn.

FTX CEO, unsecured collectors help Sullivan & Cromwell retention

Separate Jan. 17 filings from FTX CEO John Ray III and the Official Committee of Unsecured Collectors supported the transfer to retain Sullivan & Cromwell.

Ray stated the S&C group was important in bringing order to a chaotic state of affairs, including that he has additionally employed a brand new legislation agency to function counsel on issues to which S&C is perhaps conflicted.

Ray concluded:

“If the retention of any of S&C, Quinn or Alix had been to be denied, restricted or impaired for any motive, the curiosity of the Debtors’ clients and collectors, in addition to the state and federal regulators and prosecutors with whom these advisors have interaction each day, could be severely, if not irreparably harmed.”

However, FTX’s unsecured collectors stated the U.S. Trustee’s objections had been based mostly on a misinterpretation of the Chapter code.

The collectors added that it has no objection to the retention of S&C as a result of the legislation agency has carried out a considerable quantity of labor and its efforts had been integral to the circumstances. The collectors additional argued that failure to retain the agency wouldn’t be in the very best pursuits of the estates.

Moreover, the collectors stated the agency has commenced its investigation into FTX’s downfall and “is working tirelessly to uncover the fraud in its entirety (and) get better as many belongings as doable.”

Posted In: Chapter, Authorized

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