The FTX bankruptcy judge has reportedly criticized the joint letter from four US senators calling for an independent examiner in the FTX bankruptcy case.
As Cointelegraph reported, the senators sent a letter on Jan. 9 outlining concerns about ties between FTX and its legal representative, Sullivan & Cromwell LLP.
However, at a January 11 hearing, Judge John Dorsey of the US Bankruptcy Court for the District of Delaware called the letter an “inappropriate ex parte communication” that he disregarded in his decision.
“I will make my decisions on the issues based solely on the admissible evidence and the arguments presented in open court,” he said during the hearing, according to Law360. report it’s january 11
Ex parte refers to an action taken by one party in a legal proceeding without the participation of the other party.
The bipartisan January 9 letter was addressed to Judge Dorsey by Senators John Hickenlooper, Thom Tillis, Elizabeth Warren, and Cynthia Lummis, challenging the appointment of Sullivan & Cromwell LLP as FTX’s legal counsel and supporting a motion for the appointment of an independent examiner.
the movement was archived by the US Trustee on December 12.
According to the letter, the senators noted that the law firm had previously provided legal advice to FTX and that members of the law firm had left to take positions in FTX, leading one of the senators to suggest that there might be a conflict of interests.
Get this: FTX legal counsel *before the crash* want to be appointed to oversee investigations INSIDE the crash.
I’m not a legal expert, but that sounds like a conflict of interest. With @SenThomTillis @SenWarren @SenLummishttps://t.co/iz3k9yP1uT
— Senator John Hickenlooper (@SenatorHick) January 10, 2023
A Sullivan & Cromwell spokesperson told Cointelegraph that the law firm met the definition of “disinterested” under the US Bankruptcy Code and had “never served as outside lead counsel to any FTX entity.”
Related: FTX Client Names Will Remain Sealed For Now, Rules Judge
The judge’s dismissal of the Senators’ letter does not mean he will reject the motion to appoint an independent examiner or approve Sullivan & Cromwell as counsel for FTX.
The judge must still review the objection to the appointment of Sullivan & Cromwell by FTX creditor Warren Winter, whose representatives filed an amendment objection on January 10 alleging that the appointment could undermine public faith in the bankruptcy proceedings and that the law firm itself was a “target of investigation” with respect to its own “potential liability.”
Independent examiners are often appointed by bankruptcy courts to investigate the details of complex cases brought before them and are able to present information to the courts from an independent point of view.
They have been named in other high-profile bankruptcy cases, such as Lehman Brothers during the subprime crisis and crypto exchange Celsius.
