Judge slams senators' letter against FTX lawyers as 'inappropriate'

FTX’s bankruptcy justice has reportedly slammed the associated missive from 4 United States senators calling for an autarkic examiner successful the FTX bankruptcy case.

As reported by Cointelegraph, the senators sent a missive connected Jan. 9 highlighting concerns astir the ties betwixt FTX and their ineligible representative, Sullivan & Cromwell LLP.

However, successful a Jan. 11 hearing, Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware called the missive “inappropriate ex parte communication” which helium would not instrumentality into relationship successful his decision.

“I volition marque my decisions connected the matters based lone upon admissible grounds and the arguments presented successful unfastened court,” helium said during the hearing, according to Law360 report on Jan. 11.

Cast your ballot now!

Ex parte refers to an enactment taken by 1 enactment successful a ineligible proceeding without information from the opposing party.

The bipartisan Jan. 9 letter was addressed to Judge Dorsey by Senators John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis, questioning the assignment of Sullivan & Cromwell LLP arsenic counsel to FTX portion supporting a question for the appointment of an autarkic examiner.

The question was filed by the U.S. Trustee connected Dec. 12.

As per the letter, the senators noted that the instrumentality steadfast has antecedently provided FTX with ineligible advice and that members of the instrumentality steadfast had near to instrumentality positions astatine FTX, prompting 1 of the senators to suggest determination could beryllium a struggle of interest.

— Senator John Hickenlooper (@SenatorHick) January 10, 2023

A spokesperson from Sullivan & Cromwell told Cointelegraph that the instrumentality steadfast met the explanation of “disinterested” arsenic per the U.S. Bankruptcy Code and had “never served arsenic superior extracurricular counsel to immoderate FTX entity."

Related: FTX customers names volition stay sealed for now, rules judge

The judge’s dismissal of the Senators’ missive does not mean that helium volition cull the question to name an autarkic examiner oregon o.k. Sullivan & Cromwell arsenic counsel to FTX.

The justice volition inactive request to reappraisal the objection to the Sullivan & Cromwell assignment from FTX creditor Warren Winter, whose representatives filed an amended objection connected Jan. 10 claiming the assignment could undermine the public’s religion successful the bankruptcy process and the instrumentality steadfast itself was a “target for investigation” regarding its ain “potential liability.”

Independent examiners are often appointed by bankruptcy courts to analyse details of analyzable cases brought earlier them and are capable to contiguous accusation to the courts from an autarkic constituent of view.

They person been appointed successful different high-profile bankruptcy cases specified arsenic Lehman Brothers during the subprime owe situation and the crypto speech Celsius.