On Friday, chapter choose John Dorsey accepted the regulation agency Sullivan & Cromwell (S&C) to be appointed because the debtors’ counsel for FTX, regardless of an objection from Daniel Friedberg, a former FTX US compliance officer. Throughout a Zoom presentation, Friedberg claimed there was a battle of curiosity between former and present FTX executives and FTX US’ normal counsel, as Ryne Miller as soon as labored for S&C. Decide Dorsey, nevertheless, was not swayed by Friedberg’s 17-page objection and appointed S&C, stating that “there’s no proof of precise battle right here.”
FTX Chapter Raises Questions of Battle of Curiosity and Odd Choices
The day earlier than chapter choose John Dorsey accepted Sullivan & Cromwell (S&C) to symbolize the debtors as authorized counsel, James “Metalawman” Murphy printed a Twitter thread explaining that it was odd that S&C would doubtless be chosen for FTX illustration. “There’s one thing off with the FTX chapter,” Murphy insisted in his submit. Murphy, an lawyer who makes a speciality of metaverse, Web3, and digital asset topics, questioned the involvement of John J. Ray III, the brand new FTX CEO and chief restructuring officer, within the course of.
The lawyer Murphy factors out that when Ray labored with Enron because the chief restructuring officer, Ray did a superb job aggressively pursuing recoveries for the advantage of Enron’s collectors. Nevertheless, Murphy stated that Ray is appearing very in a different way from the hard-bargaining CEO he was often known as at Enron and questioned this alteration in angle. For instance, the metaverse lawyer detailed that when he was restructuring Enron, Ray by no means advised for a second that one in all Enron’s major outdoors regulation corporations ought to function debtor’s counsel.
“Inexplicably, Mr. Ray now helps S&C’s transfer to function debtors’ counsel,” Murphy famous. The lawyer additional stated that that is regardless of S&C dealing with “20 engagements for FTX in simply 16 months,” being “paid $8.5 million in charges,” and “representing key figures [Sam Bankman-Fried] and [Nishad Singh] personally.” Murphy remarked that at Enron, Ray “aggressively pursued claims towards Enron’s outdoors regulation corporations.” The lawyer continued:
Vinson & Elkins paid $30 million to settle and Andrews Kurth paid $18.5 million. In line with an unbiased report, these corporations failed to reply to purple flags suggesting doable misconduct.
Murphy additionally opined that the final word irony of this example is that the large charges will probably be paid by the victims of the FTX fraud — the purchasers. “My prediction: The unified entrance of Mr. Ray, the Official Collectors Committee, and S&C will prevail, and the choose will appoint Sullivan & Cromwell debtors’ counsel … This isn’t regular,” Murphy concluded. Through the listening to the following day, Daniel Friedberg, a former FTX US compliance officer, objected to S&C being appointed and submitted a 17-page objection for the chapter choose to evaluate. Within the submitting, the previous FTX US compliance officer stated that Ryne Miller, FTX US’ normal counsel, was as soon as employed by S&C.
“Mr. Miller knowledgeable me that it is vitally essential for him personally to channel plenty of enterprise to S&C as he wished to return there as a companion after his stint with the debtors,” Friedberg’s criticism particulars. Regardless of the objection, Chapter Decide Dorsey advised court docket members that “there’s no proof of precise battle right here,” including that it was “rumour, innuendo, hypothesis, rumors, and positively not one thing I’d enable to be launched into proof.”
After S&C was appointed as debtors’ counsel, James “Metalawman” Murphy added his two cents in regards to the determination. “As anticipated, the choose approves Sullivan & Cromwell as debtors’ counsel. Decide says, on the file earlier than him, he has no concern about S&C conflicts of curiosity,” Murphy wrote. “Any suspense about this determination was eradicated when the U.S. Trustee switched place to favor S&C’s appointment.” The identical day, U.S. federal prosecutors seized practically $700 million in belongings from the disgraced FTX co-founder Bankman-Fried.
Tags on this story
20 engagements, lawyer, bankrupcty proceedings, Chapter Case, chapter choose, chief restructuring officer, battle, Battle of Curiosity, counsel, court docket case, Clients, Daniel Friedberg, debtors’ counsel, digital asset topics, Enron, Payment funds, Charges, former FTX US compliance officer, ftx, normal counsel, James “Metalawman” Murphy, John Dorsey, John J. Ray III, Legal professionals, authorized counsel, litigation agency, Metaverse Lawyer, New FTX CEO, Nishad Singh, ryne miller, S&C, Sam Bankman-Fried, sbf, Sullivan Cromwell, Twitter thread, Web3 lawyer, Zoom presentation
What do you concentrate on the appointment of Sullivan & Cromwell as debtors’ counsel for FTX and the allegations of battle of curiosity raised by former FTX US compliance officer Daniel Friedberg and James “Metalawman” Murphy? Share your ideas within the feedback beneath.
Jamie Redman
Picture Credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This text is for informational functions solely. It isn’t a direct supply or solicitation of a suggestion to purchase or promote, or a suggestion or endorsement of any merchandise, companies, or firms. Bitcoin.com doesn’t present funding, tax, authorized, or accounting recommendation. Neither the corporate nor the creator is accountable, instantly or not directly, for any injury or loss brought on or alleged to be attributable to or in reference to the usage of or reliance on any content material, items or companies talked about on this article.
Extra Fashionable NewsIn Case You Missed It