James Bromley, one of the lawyers representing debtors in the FTX bankruptcy case, criticized social media activity against his law firm promulgated by posts by former CEO Sam Bankman-Fried.
At a January 20 hearing in the District of Delaware, the attorneys discussed motions dealing with potential conflicts of interest between Sullivan & Cromwell, the law firm handling the FTX bankruptcy investigation, and the cryptocurrency exchange. Bromley, a partner at Sullivan & Cromwell, rejected the narrative that the law firm could not act as a disinterested examiner given that it had previously provided legal services to FTX and one of its former partners, Ryne Miller, became lead counsel for FTX. FTX US.
On January 19, former FTX regulatory director Daniel Friedberg filed a plea with the court alleging that Miller wanted to push the business to Sullivan & Cromwell, stating that he wanted to become a partner in the firm following the bankruptcy case. Bromley argued in court that if the judge were to grant a stay based on these allegations, the debtors would face “additional Twitter attacks” and similar filings that would likely result in delays.
Friedberg enrolled in the virtual bankruptcy proceeding, but was not allowed to speak because he did not appear in court in person. The judge ruled that there were insufficient potential conflicts of interest to prevent Sullivan & Cromwell from continuing to act as counsel for the debtors.
“One of the things that debtors have generally faced in these cases is the Twitter attack,” Bromley said. “It is very difficult, Your Honor, to cross-examine a tweet, particularly tweets made by people who are under criminal indictment and whose travel is restricted.”
Related: US lawmakers ask court to approve ‘independent examiner’ in FTX bankruptcy case
Bromley later suggested that Friedberg and Bankman-Fried had been using social media to “throw stones” at debtors for providing information to authorities, and the statement came “hot on the heels of two very long and confusing tweets” from SBF. He also noted that Bankman-Fried was “immediately online” to respond to a report in which CEO John Ray commented on FTX’s creditworthiness and criticized information intended to provide transparency for debtors.
“Mr. Bankman-Fried is behind all of this, and every time we move this, wherever we move it, I have absolute certainty that he’s going to try to do something to get in the way. He’s lashing out.”
At the time of publication, Bankman-Fried had not commented on the ruling, but retweeted speculation by others that Sullivan & Cromwell would continue to represent FTX debtors.
