bankruptcy filing

FTX Paid Crypto Bankruptcy Lawyers $12 Million for Early Work

Bankrupt crypto exchange FTX Ltd. paid its lead lawyers more than $12 million to handle the earliest portions of the closely watched Chapter 11 case, according to a Wednesday court filing.

Law firm Sullivan & Cromwell received a $12 million retainer from an FTX-controlled company shortly before the exchange’s Nov. 11 bankruptcy filing, the filing shows. The firm has drawn a little more than $3 million of that, largely for work done in the days leading up to the rushed bankruptcy filing.

Quinn Emanuel is also working for FTX and its board of directors as special counsel in a litigation capacity, looking for legal claims the bankruptcy estate might be able to bring. The firm received about $575,000 in the three months leading up to FTX’s filing, according to another court filing.

Landis Rath & Cobb, whose lawyers are FTX’s local Delaware counsel, received a $300,000 retainer in the 90 days leading up the filing.

FTX imploded in spectacular fashion in early November, leading to the firing of co-founder Sam Bankman-Fried and a rushed Chapter 11 filing of more than 100 FTX-related companies. In a sign of the hurried pace, FTX didn’t submit typical “first-day” filings until

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December 25, 2022 by ATTORNEY

Infowars host files for Chapter 11 bankruptcy

Infowars host files for Chapter 11 bankruptcy
nfoWars founder Alex Jones speaks to the media outside Waterbury Superior Court during his trial on September 21, 2022 in Waterbury, Connecticut.

InfoWars founder Alex Jones speaks in Waterbury, Conn. Photo: Joe Buglewicz/Getty Images

Alex Jones filed for personal bankruptcy in Texas on Friday, according to a court filing.

Why it matters: The Chapter 11 bankruptcy filing comes after Jones and his company, Free Speech Systems, were ordered to pay almost $1.5 billion in damages for falsely claiming the Sandy Hook mass shooting was a hoax.

Driving the news: The bankruptcy filing said Jones owns between $1 million and $10 million of assets with $1 billion to $10 billion of liabilities.

  • Jones’ affiliate business Free Speech Systems is also mentioned in the lawsuit, having filed for bankruptcy in July.

What they’re saying: “Like every other cowardly move Alex Jones has made, this bankruptcy will not work,” said Chris Mattei, the attorney representing the Sandy Hook families, in a statement to Axios.

  • “The bankruptcy system does not protect anyone who engages in intentional and egregious attacks on others, as Mr. Jones did. The American judicial system will hold Alex Jones accountable, and we will never stop working to enforce the jury’s verdict.”

Zoom out: A Connecticut jury ordered Jones to pay $965 million in damages to Sandy Hook victims in a defamation

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December 7, 2022 by ATTORNEY

Infowars host Alex Jones files for personal bankruptcy

FILE - Infowars founder Alex Jones appears in court to testify during the Sandy Hook defamation damages trial at Connecticut Superior Court in Waterbury, Conn., Thursday, Sept. 22, 2022. Jones has filed for personal <a href=bankruptcy protection in Texas as he faces nearly $1.5 billion in court judgments over conspiracy theories he spread about the Sandy Hook school massacre. Jones filed for Chapter 11 bankruptcy protection in bankruptcy court in Houston on Friday, Dec. 2. (Tyler Sizemore/Hearst Connecticut Media via AP, Pool, File)” title=”FILE – Infowars founder Alex Jones appears in court to testify during the Sandy Hook defamation damages trial at Connecticut Superior Court in Waterbury, Conn., Thursday, Sept. 22, 2022. Jones has filed for personal bankruptcy protection in Texas as he faces nearly $1.5 billion in court judgments over conspiracy theories he spread about the Sandy Hook school massacre. Jones filed for Chapter 11 bankruptcy protection in bankruptcy court in Houston on Friday, Dec. 2. (Tyler Sizemore/Hearst Connecticut Media via AP, Pool, File)” loading=”lazy”/

FILE – Infowars founder Alex Jones appears in court to testify during the Sandy Hook defamation damages trial at Connecticut Superior Court in Waterbury, Conn., Thursday, Sept. 22, 2022. Jones has filed for personal bankruptcy protection in Texas as he faces nearly $1.5 billion in court judgments over conspiracy theories he spread about the Sandy Hook school massacre. Jones filed for Chapter 11 bankruptcy protection in bankruptcy court in

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December 6, 2022 by ATTORNEY

Executive bonuses at opioid firm Endo were ‘excessive’ and ‘secret’ before bankruptcy, state AGs say

Seven state attorneys general and a court-appointed bankruptcy federal watchdog are opposing up to $94 million in pre-bankruptcy bonuses paid to top executives and other insiders at opioid drug firm Endo International in Chester County, court documents show.

The bonuses to the highest executives were doled out in “secret” and drain financial resources of the money-losing Endo available for victims of the Malvern company’s addictive pills, according to state attorneys general who filed their objections as a committee on Wednesday in New York.

Pennsylvania Attorney General Josh Shapiro is one of the seven whose court filing called the top executive pre-bankruptcy bonuses “excessive.”

Endo, facing mounds of litigation over its alleged role in the national opioid crisis, filed for bankruptcy protection on Aug. 16. The Inquirer first reported on the bonuses days later.

U.S. Trustee William Harrington, the watchdog, said in a separate court filing earlier this month that Endo paid $94 million in bonuses to top executives and other insiders in the months prior to the bankruptcy filing, while Endo’s restructuring plan leaves only $27.4 million initially for individual opioid victims who are not state entities.

Endo has “provided virtually no information, much less sufficient information” to evaluate the

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September 24, 2022 by ATTORNEY

Limiting ‘preference’ liability exposure in bankruptcy

Limiting ‘preference’ liability exposure in bankruptcy
Limiting ‘preference’ liability exposure in bankruptcy

Joe Foster

As the saying goes, what goes up, must come down. After years of robust growth, the U.S. economy appears to be hitting a rough patch. In the coming months, it is likely that some businesses will not survive the challenges that lie ahead, and will be forced to file bankruptcy.

As bankruptcy attorneys, we find that one of the most difficult issues to explain to a client is receipt of a demand letter from a bankruptcy trustee seeking return of payments from a customer received months or years before. To add insult to injury, the customer, now a debtor in bankruptcy, often still owes the client. In addition, the letter typically includes a threat that if the payment is not returned, the trustee will file a lawsuit.

This claim by the trustee is referred to as a “preference” action. The intent of the law is to prohibit insolvent companies from playing favorites or preferring a particular vendor over another. Preference claims force the so-called “preferred” vendor to return the payment so that all general creditors can enjoy equality of treatment.

A preference claim is, unfortunately, very simple to bring and very easy to prove. To successfully assert the

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September 5, 2022 by ATTORNEY
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