In Hunt for FTX Assets, Lawyers Locate Billions in Cash and Crypto

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FTX also plans to raise funds by selling some business operations in the Bahamas, Japan and Europe that could be viable with a capital injection. And the company plans to work with Bahamian officials to market the company’s real estate, a total of 36 properties valued at $253 million.

But it’s unclear at what price all of these assets can sell, or how quickly. In short, FTX customers and lenders still have to prepare for a multi-year legal drama before they see any money back, and they stand to suffer significant losses, experts say.

Creditors may have the option of obtaining coins or digital cash. It depends on the nature of the underlying crypto, said Kenneth Marshall, a financial adviser who specializes in working with investors who experience failed deals, including those involving crypto. It could drag on for a long time.

The latest FTX asset disclosure also shed light on the work of Sullivan & Cromwell, one of the world’s most prestigious business law firms. He not only represents FTX in the bankruptcy, but also performed legal work for the exchange before its collapse.

On Friday, Andrew R. Vara, the U.S. trustee in the bankruptcy proceedings, filed an objection to FTX’s decision to retain Sullivan & Cromwell, saying its pre-bankruptcy work poses a potential conflict of interest. The trustee has also advocated for an independent reviewer to be appointed to investigate the issues.

Law firm bankruptcy work doesn’t come cheap: Sullivan & Cromwell partners’ billing rates range from $1,575 to $2,165 an hour, according to previous court filings.

A Sullivan & Cromwell representative pointed to a court filing on Tuesday that said the law firm worked tirelessly to recover the company’s assets. In a related court filing, an attorney for the firm, Andrew Dietderich, defended the firm’s previous work for FTX and its ability to investigate the events surrounding the exchange’s collapse.

Mr Dietderich disputed Mr Bankman-Frieds’ earlier claim that he had been pressured to put the company out of business. He said in the filing that Mr. Bankman-Fried brought in restructuring lawyer John J. Ray III to replace him as chief executive after consulting with his father and three other lawyers.

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