FTX Bankruptcy Judge Agrees Independent Examiner Would Mean More Risk

Appointing an independent examiner in the FTX bankruptcy proceedings “would create an increased risk of further loss through inadvertent disclosures or hacking,” Judge John Dorsery said in a hearing on Wednesday.

Dorsey, who’s overseeing the crypto exchange’s Chapter 11 case in Delaware, denied a motion from the U.S. Trustee to appoint an examiner. He cited concerns about security and cost, echoing arguments made independent-examiner-assets-risk” data-ylk=”slk:last week” class=”link “last week by attorneys representing FTX, the creditor committee, and the joint provisional liquidators.

When a bankruptcy judge appoints an independent examiner, debtors have to pay the bill. That means FTX would have had to pay for an investigation that Dorsey estimated could have cost more than $100 million.

“It is important to keep in mind that while we talk about the cost of an investigation being borne by the debtors, we are actually talking about the cost being borne by the creditors,” Dorsey said during the hearing. “Every dollar spent in these cases on administrative expenses is $1 less to the creditors.”

FTX Bankruptcy Lawyers Say Independent Examiner Would Put Assets at Risk

To bolster its argument against an examiner, the FTX legal team had newly appointed FTX CEO

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February 20, 2023 by ATTORNEY

Celsius Network chooses NovaWulf bid for bankruptcy exit

Feb 15 (Reuters) – Crypto lender Celsius Network will seek to exit bankruptcy under the guidance of asset manager NovaWulf Digital Management, which will take over the operations of a new company that will be owned by Celsius customers, the company said at a court hearing in Manhattan on Wednesday.

The proposed deal with NovaWulf should allow Celsius to exit Chapter 11 and begin returning crypto assets to customers in June, Celsius attorney Ross Kwasteniet said at Wednesday’s hearing.

Celsius selected NovaWulf’s bid out of more than 130 proposals received, saying that NovaWulf was the only finalist that intended to maintain long-term control over Celsius’ harder-to-liquidate assets, like its loan portfolio and bitcoin mining business.

Those assets would be owned by Celsius creditors and managed by NovaWulf under a profit-sharing agreement if U.S. Bankruptcy Judge Martin Glenn, who is overseeing Celsius’ Chapter 11 process, and creditors sign off on the deal.

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Crypto lenders such as Celsius boomed during the COVID-19 pandemic, drawing customers with the promise of high interest rates on their cryptocurrency deposits and the ability to borrow against their crypto assets. But many companies in the highly interconnected sector went bankrupt

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February 19, 2023 by ATTORNEY

Alex Jones Holding Onto Jan. 6 Rioters’ Guns: Bankruptcy Docs

  • Alex Jones is holding onto firearms for January 6 rioters, The Washington Post reported.
  • Jones filed for bankruptcy after a judge ordered he pays the families of Sandy Hook victims.
  • The controversial talk show host had been subpoenaed for his role in the Jan. 6 insurrection.

InfoWars conspiracy theorist Alex Jones reported that he’s holding onto guns for two January 6th rioters, according to bankruptcy paperwork obtained by The Washington Post. 

The document required that he identify property in his possession that he does not own. Among the items, Jones wrote that he’s “holding firearms for certain January 6th participants,” the document reads, per the Post.

Jones recently told HuffPost that he is holding onto weapons for InfoWars War Room host Owen Shroyer and video editor Sam Montoya. Shroyer and Montoya were two of more than a thousand people charged in the Capitol riot so far.

“Both their lawyers respectively asked us if they could store those guns here while the cases were going on,” Jones told the outlet. “Due to the request of their

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February 18, 2023 by ATTORNEY

FTX Bankruptcy Lawyers Say Independent Examiner Would Put Assets at Risk

The judge overseeing the FTX bankruptcy proceeding still hasn’t decided whether he will appoint an independent examiner after a 4-hour hearing that included testimony from FTX CEO John Ray III.

Judge John Doresey, who’s overseeing the bankruptcy proceedings, said Monday he’s asked the attorneys representing FTX, the unsecured creditor committee, U.S. Trustee and the Joint Public Liquidators of the Bahamas to discuss “a consensual resolution.” The next FTX court hearing is scheduled for Wednesday, but there’s no sign yet the judge will make a ruling then.

Ray was appointed when crypto exchange FTX filed for bankruptcy and founder Sam Bankman-Fried stepped down on November 11. The company, once an influential giant in the industry, is accused of having commingled client funds with those of its sister company, Alameda Research—a crypto trading firm also founded by Bankman-Fried.

Ray said during his testimony on Monday that he and his team have been fielding daily requests from state and federal investigators. Ray also testified that he did not find examiner’s reports helpful in two prior bankruptcies he’s overseen, Enron and Residential Capital, adding that “the reports were somewhat ambivalent in the conclusionary sense.”

The FTX legal team has been arguing that the cost

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February 13, 2023 by ATTORNEY

3AC founder has ‘chosen to ignore his duties’ by not responding to subpoena, say bankruptcy lawyers

Three Arrows Capital founder Kyle Davies has not responded to a subpoena issued over Twitter aiming to gather information related to the firm’s assets.

In a Feb. 7 filing with United States Bankruptcy Court in the Southern District of New York, lawyers with the Latham & Watkins firm representing 3AC liquidators said Davies had “chosen to ignore his duties to Three Arrows” by failing to comply with the online subpoena.

Courts in Singapore and the U.S. previously authorized the use of Twitter to issue subpoenas, due to the whereabouts of 3AC founders Davies and Su Zhu being unconfirmed while their social media presence remained active.

The subpoena, which was tweeted to a newly created account on Jan. 5, ordered Davies to provide the 3AC liquidators with documents related to accessing account information, including seed phrases and private keys. In addition, the court told the 3AC founder to include details on accounts at centralized or decentralized exchanges and other assets.

“Under the terms of the Subpoena Order and the Subpoena, Mr. Davies was required to respond by electronic production to counsel for the Foreign Representatives by January 26, 2023,” said the filing. “He did not.”

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February 12, 2023 by ATTORNEY
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