January 29, 2023

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In Search of FTX Assets, Lawyers Locate Billions in Cash and Cryptocurrency

FTX also plans to raise money by selling some business operations in the Bahamas, Japan and Europe that might be viable through a capital injection. The company plans to work with officials in the Bahamas to market the company’s real estate holdings – a total of 36 properties worth $253 million.

But it’s unclear how much of all those assets could be sold for, or how quickly. In short, FTX clients and lenders still need to prepare for a multi-year legal drama before they see a return for any money, and they could potentially incur huge losses, experts say.

“It is possible to give creditors the option of acquiring digital currency or cash. It depends on what the underlying cryptocurrency is,” said Kenneth Marshall, a financial advisor who specializes in working with investors who have been victims of failed deals, including those related to cryptocurrencies. to go on for a long time.”

The recent disclosure of FTX’s assets has also shed light on the work of Sullivan & Cromwell, one of the world’s most respected law firms. Not only did she represent FTX in bankruptcy, she also did legal work for the exchange before it crashed.

On Friday, Andrew R. Vara, a US trustee in bankruptcy proceedings, filed an objection to FTX’s decision to retain Sullivan & Cromwell, claiming that its business prior to bankruptcy involved a potential conflict of interest. He also called for the trustee to appoint an independent examiner to investigate matters.

The law firm’s bankruptcy business isn’t cheap: Billing rates for Sullivan and Cromwell’s partners range from $1,575 to $2,165 an hour, according to a previous court filing.

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A representative for Sullivan & Cromwell referred to a court filing on Tuesday saying the law firm had “worked tirelessly” to recover the company’s assets. In a related court filing, Andrew Dietrich, the firm’s attorney, defended the firm’s past work for FTX and its ability to conduct an investigation into the events surrounding the stock market crash.

Mr. Dietderich contested Mr. Bankmann-Fried’s previous claim that he was pressured into bankruptcy. In the suit, he said Mr. Bankman Freed took advantage of restructuring attorney John J. Ray III to replace him as CEO after consulting with his father and three other attorneys.