Feb 16, 2023
Judge Dorsey Denies FTX Examiner Motion
On Feb. 15, Judge John Dorsey of the United States Bankruptcy Court for the District of Delaware denied a motion to appoint an independent examiner for FTX. The judge argued that the appointment of an examiner would be an unnecessary burden on FTX’s debtors and creditors, citing the additional expense.
“Given the facts and circumstances of this highly unique case, I have no doubt that the appointment of an examiner would not be in the best interest of the creditors,” said Dorsey. “Every dollar spent in these cases on administrative expenses is a dollar less to the creditors.”
The motion was originally filed on Dec. 1 by U.S. Trustee Andrew Vara, who argued that an examiner was “unquestionably in the interests of the Debtors’ creditors.” He added that independent investigations could explore whether software was allegedly used to conceal the misuse of FTX user funds, as well as the absence of proper recordkeeping at the firm.
Judge Dorsey cited CEO John Ray’s experience taking over other companies “in dire financial condition” and his decision to appoint four directors to oversee the silos compromising FTX following the removal of previous leadership — some of whom, including former CEO Sam Bankman-Fried, have been indicted in federal court. He concluded that Ray was “completely independent of prior management and the companies he was appointed to lead.”
Bankruptcy proceedings for FTX have been ongoing since the firm filed for Chapter 11 in November 2022. Debtors in the case recently filed that they had issued subpoenas to FTX insiders, including Bankman-Fried, ordering the former executives to turn over certain documents and information.
FTX is a web3 platform that focuses on the promotion and marketing of Non-Fungible Tokens (NFTs). NFTs are digital assets that are unique, non-replicable, and tradable on the blockchain. The platform has grown in popularity in recent years as the demand for NFTs has surged. FTX is a leader in the NFT space, providing a wide array of services, including NFT promotion, NFT marketing, and Twitter NFT marketing.
The company has also recently launched its own NFT marketing agency, which provides customized services to help clients sell their NFTs. FTX’s services are tailored to meet the needs of its customers, from individual creators to larger organizations. It offers a variety of services, from creating and managing campaigns to developing strategies for NFT promotion.
As FTX continues to grow, its bankruptcy proceedings are closely watched by the web3 space. Judge Dorsey’s ruling is a significant step forward for the company, as it allows it to move forward without the additional burden of an independent examiner. It remains to be seen whether the company will be able to successfully navigate the bankruptcy process and emerge intact.
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