FTX Lawyers Oppose Setting Up Independent Examiner
Following increased calls for the setting up of an independent examiner, the FTX lawyers, joint provisional liquidators of FTX US and the Bahamas and a committee of creditors have collectively opposed the motion.
This will be fascinating.
4 Senators submitted a letter asking for an Independent Examiner. Will they do more?
Several States have entered the FTX case. Will they lend support for an Examiner?
The SEC asked for the Independent Examiner in Enron. Will they say anything here? https://t.co/KiSZKYonCD
— MetaLawMan (@MetaLawMan) January 26, 2023
FTX lawyers argued that setting up an independent examiner to conduct an investigation on the collapse of FTX exchange could gulp more than $100 million without any significant benefits or improvement.
The counter position was expressed on Jan. 25 in reaction to a motion from the United States Trustee in December.
However, the FTX lawyers further argued that creditors have nothing to gain from the exercise and it also amounts to duplication of functions being accrued to FTX new CEO John J. Ray III, a committee of creditors, law enforcement agencies, among others.
1) Cooperation between the Task Force members seems to be high
2) Lawyers billing $2165 an hour making the argument that an Examiner's costs would be wasteful to the estate. Ironic pic.twitter.com/ssPZyJeDoO
— FTX Creditor (@AFTXcreditor) January 25, 2023
It should be noted that the creditor’s committee, otherwise known as the Official Committee of Unsecured Creditors has also tendered their objection to the appointment of an independent examiner on Jan. 25.
In the same vein, the Joint provisional liquidators in the Bahamas and FTX US have equally established their opposition to the appointment on Jan. 25 via a filing.
There is no mincing word that the appointment of an independent examiner has been at the centrepiece since the commencement of a panel of inquiry into the FTX’s bankruptcy trial.
Developments on FTX Trials
Since the commencement of trials into the FTX collapse, there have been a series of developments and regulations. Recall that Judge John Dorsey had granted FTX’s lawyers request to conceal the names and identities of over nine million customers.
Meanwhile, the judge will decide either the appointment of an independent examiner or not during a court hearing on Feb. 6.
It is noteworthy that independent examiners are appointed by bankruptcy courts to investigate details of complex cases with a view to uncovering hidden facts and activities that would be helpful during trials.