FTX Bankruptcy: Judge Delays Decision on Appointing Independent Examiner Amid Cost Concerns
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 reach 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. A representative for the U.S. Department of Justiceâs Trustee contended, however, that the appointment of an independent examiner was mandated by Congress and no longer within Dorseyâs authority.
FTX Bankruptcy Hearing Highlights Cost Concerns and Calls for Impartiality
Three days ago, Bitcoin.com News reported on the U.S. Trustee in the FTX bankruptcy case and the governmentâs request to appoint an independent examiner. At the latest hearing, FTXâs lawyers from Sullivan & Cromwell argued that the endeavor could be costly.
John J. Ray III, FTXâs new CEO, estimated that expenses could reach between $90 million and $100 million. James Bromley of Sullivan & Cromwell said, âItâs just going to result in duplicated effort and a significant amount of expense. We donât have enough money to pay back all of our creditors.â
Bromley maintained that there is âno evidenceâ that any outside professionals would be more impartial than FTXâs current experts. FTX debtors have a number of experts working on the case including the cybersecurity firm Sygnia. FTXâs executives and legal teams are collaborating with criminal investigators and top government regulators.
Ray, FTXâs new CEO, earned roughly $690,000 for his work last year and continued to work during Christmas and the holiday season. Juliet Sarkessian, representing the U.S. Trustee, characterized the FTX situation as a âdumpster fireâ and emphasized that the appointment of an examiner was mandated by Congress in these circumstances.
Sarkessianâs comments align with the letter sent to the court by senators 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 numerous questions âremain unanswered.â Sarkessian believes that an examiner may uncover information that would not be discovered otherwise and could reveal any wrongdoing by specific FTX employees.
During his testimony, FTX CEO Ray described the bankruptcy as âpure hellâ when he listed his expenses from 2022. He also noted that FTX was unlike anything he had ever encountered and that former FTX executives did not maintain âa single list of anything.â
What are your thoughts on the ongoing FTX bankruptcy case and the potential appointment of an independent examiner? Share your insights in the comments section below.