FTX Bankruptcy: First Day Highlights
Fri Nov 25, 2022 3:51 pm Bankruptcy Filings

The FTX Group chapter 11 debtors made their first bankruptcy court appearance before Delaware Bankruptcy Judge John T. Dorsey earlier this week. Reorg’s First Day team covered the hearing via our Live Blog platform. The Securities Commission of The Bahamas issued a statement regarding “certain remarks” made by the FTX Group debtors at their first day hearing on Tuesday “in connection with the motion to transfer the venue of FTX Digital Markets’ chapter 15 proceedings.

James L. Bromley of Sullivan & Cromwell said this background resulted in “one of the most difficult collapses in corporate America and in the world.” He added that Binance’s divestiture from FTX would have to be “investigated.”

Bromley characterized FTX as operating as the “personal fiefdom” of Bankman-Fried, remarking that there was a “lack of corporate controls that no-one in this profession has ever seen.” Among the resulting issues Bromley discussed were “substantial” transfers of funds to Alameda from the other FTX entities, which were utilized for investments unrelated to FTX’s business, including the purchase of over $300 million of Bahamian real estate.

At the conclusion of the hearing, the court set a second day hearing for Jan. 11, 2023, at 10 a.m. ET, and Judge Dorsey directed the parties to confer on the scheduling of a recognition hearing in the FTX Digital Markets’ chapter 15 case. Prior to the hearing, the Bahamian joint provisional liquidators for FTX DM cleared a hurdle for the cases by consenting to the FTX Group debtors’ motion to transfer the chapter 15 venue, pending in the Southern District of New York, to Delaware for combined administration before Judge Dorsey. Going forward, the commission says that it will “continue to evaluate the situation” and “act in accordance with directions issued by the Supreme Court of The Bahamas.”

Reorg is continuing to follow the FTX bankruptcy, as well as other notable cryptocurrency companies Voyager Digital and Celsius Network. To keep up with our coverage in these developing bankruptcy litigations, request a demo today.

For more of Reorg’s cryptocurrency coverage, watch our recent webinar and listen to the Americas Core Credit weekly podcast.

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