Judge John Dorsey has delayed his decision on whether to appoint an independent examiner in the FTX case. At the latest hearing, Dorsey acknowledged that the cost to debtors could be in the tens of millions of dollars. Currently, the bankruptcy judge is hopeful that the issue will be resolved through a mutually agreed upon solution between both parties. However, a representative for the US Department of Justice Receiver maintained that the appointment of an independent examiner was mandated by Congress and is no longer within Dorsey’s authority.
FTX bankruptcy hearing highlights cost concerns and calls for fairness
Three days ago, Bitcoin.com News reported on the US trustee in the FTX bankruptcy case and the government’s request to appoint an independent examiner. Later than audienceSullivan & Cromwell’s FTX lawyers argued that the effort could be costly.
John J. Ray III, the new CEO of FTX, estimated that the expenses could reach between $90 million and $100 million. James Bromley of Sullivan & Cromwell said: “It will simply result in duplicate effort and a significant amount of expense. We don’t have enough money to pay all our creditors.”
Bromley maintained that there is “no evidence” that any outside professional is more impartial than FTX’s current experts. FTX debtors have several experts working on the case, including cybersecurity firm Sygnia. FTX executives and legal teams are collaborating with criminal investigators and leading government regulators.
Ray, the new CEO of FTX, earned approximately $690,000 for his work last year and continued to work through Christmas and the holiday season. Juliet Sarkessian, representing the US Trustee, characterized the FTX situation as a “dump fire” and emphasized that the appointment of an examiner was mandated by Congress in these circumstances.
Sarkessian’s comments align with the letter sent to the court by Sens. Cynthia Lummis (R-WY), Thom Tillis (R-NC), Elizabeth Warren (D-MA) and John Hickenlooper (D-CO). The senators urged the court to appoint an independent examiner, emphasizing that many questions “remain unanswered.” Sarkessian believes that an examiner can discover information that would not otherwise be discovered and could reveal any wrongdoing on the part of specific FTX employees.
During his testimony, FTX CEO Ray described the bankruptcy as “pure hell” when he listed his expenses since 2022. He also noted that FTX was unlike anything he had ever known and that former FTX executives did not maintain “a just a list of nothing.” ”
What do you think about the ongoing FTX bankruptcy case and the possible appointment of an independent examiner? Share your ideas in the comments section below.
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