{"id":16720,"date":"2023-01-21T21:29:51","date_gmt":"2023-01-21T21:29:51","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/objections-raised-over-appointment-of-sullivan-cromwell-as-debtors-counsel-for-ftx-bitcoin-news\/"},"modified":"2023-01-21T21:29:51","modified_gmt":"2023-01-21T21:29:51","slug":"objections-raised-over-appointment-of-sullivan-cromwell-as-debtors-counsel-for-ftx-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/objections-raised-over-appointment-of-sullivan-cromwell-as-debtors-counsel-for-ftx-bitcoin-news\/","title":{"rendered":"Objections Raised Over Appointment of Sullivan & Cromwell as Debtors’ Counsel for FTX \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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On Friday, bankruptcy judge John Dorsey approved the law firm Sullivan & Cromwell (S&C) to be appointed as the debtors\u2019 counsel for FTX, despite an objection from Daniel Friedberg, a former FTX US compliance officer. During a Zoom presentation, Friedberg claimed there was a conflict of interest between former and current FTX executives and FTX US\u2019 general counsel, as Ryne Miller once worked for S&C. Judge Dorsey, however, was not swayed by Friedberg\u2019s 17-page objection and appointed S&C, stating that \u201cthere\u2019s no evidence of actual conflict here.\u201d<\/strong><\/p>\n

FTX Bankruptcy Raises Questions of Conflict of Interest and Odd Decisions<\/h2>\n

The day before bankruptcy judge John Dorsey approved Sullivan & Cromwell (S&C) to represent the debtors as legal counsel, James \u201cMetalawman\u201d Murphy<\/a> published a Twitter thread explaining<\/a> that it was odd that S&C would likely be chosen for FTX representation. \u201cThere\u2019s something off with the FTX bankruptcy,\u201d Murphy insisted in his post. Murphy, an attorney who specializes in metaverse, Web3, and digital asset subjects, questioned the involvement of John J. Ray III<\/a>, the new FTX CEO and chief restructuring officer, in the process.<\/p>\n

The attorney Murphy points out that when Ray worked with Enron as the chief restructuring officer, Ray did an excellent job aggressively pursuing recoveries for the benefit of Enron\u2019s creditors. However, Murphy said<\/a> that Ray is acting very differently from the hard-bargaining CEO he was known as at Enron and questioned this change in attitude. For example, the metaverse lawyer detailed that when he was restructuring Enron, Ray never suggested for a moment that one of Enron\u2019s primary outside law firms should serve as debtor\u2019s counsel.<\/p>\n

\u201cInexplicably, Mr. Ray now supports S&C\u2019s move to serve as debtors\u2019 counsel,\u201d Murphy noted<\/a>. The lawyer further said that this is despite S&C handling \u201c20 engagements for FTX in just 16 months,\u201d being \u201cpaid $8.5 million in fees,\u201d and \u201crepresenting key figures [Sam Bankman-Fried] and [Nishad Singh] personally.\u201d Murphy remarked that at Enron, Ray \u201caggressively pursued claims against Enron\u2019s outside law firms.\u201d The lawyer continued<\/a>:<\/p>\n

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Vinson & Elkins paid $30 million to settle and Andrews Kurth paid $18.5 million. According to an independent report, these firms failed to respond to red flags suggesting possible misconduct.<\/p>\n<\/blockquote>\n

Murphy also opined<\/a> that the ultimate irony of this situation is that the enormous fees will be paid by the victims of the FTX fraud \u2014 the customers. \u201cMy prediction: The unified front of Mr. Ray, the Official Creditors Committee, and S&C will prevail, and the judge will appoint Sullivan & Cromwell debtors\u2019 counsel \u2026 This is not normal,\u201d Murphy concluded. During the hearing the next day, Daniel Friedberg, a former FTX US compliance officer, objected<\/a> to S&C being appointed and submitted a 17-page objection for the bankruptcy judge to review. In the filing, the former FTX US compliance officer said that Ryne Miller, FTX US\u2019 general counsel, was once employed by S&C<\/a>.<\/p>\n

\u201cMr. Miller informed me that it is very important for him personally to channel a lot of business to S&C as he wanted to return there as a partner after his stint with the debtors,\u201d Friedberg\u2019s complaint details. Despite the objection, Bankruptcy Judge Dorsey told court participants that \u201cthere\u2019s no evidence of actual conflict here,\u201d adding that it was \u201chearsay, innuendo, speculation, rumors, and certainly not something I would allow to be introduced into evidence.\u201d<\/p>\n

After S&C was appointed as debtors\u2019 counsel, James \u201cMetalawman\u201d Murphy added his two cents about the decision. \u201cAs expected, the judge approves Sullivan & Cromwell as debtors\u2019 counsel. Judge says, on the record before him, he has no concern about S&C conflicts of interest,\u201d Murphy wrote<\/a>. \u201cAny suspense about this decision was eliminated when the U.S. Trustee switched position to favor S&C\u2019s appointment.\u201d The same day, U.S. federal prosecutors seized<\/a> nearly $700 million in assets from the disgraced FTX co-founder Bankman-Fried.<\/p>\n

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\nTags in this story
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20 engagements<\/a>, attorney<\/a>, bankrupcty proceedings<\/a>, Bankruptcy Case<\/a>, bankruptcy judge<\/a>, chief restructuring officer<\/a>, conflict<\/a>, Conflict of Interest<\/a>, counsel<\/a>, court case<\/a>, Customers<\/a>, Daniel Friedberg<\/a>, debtors’ counsel<\/a>, digital asset subjects<\/a>, Enron<\/a>, Fee payments<\/a>, Fees<\/a>, former FTX US compliance officer<\/a>, ftx<\/a>, general counsel<\/a>, James “Metalawman” Murphy<\/a>, John Dorsey<\/a>, John J. Ray III<\/a>, Lawyers<\/a>, legal counsel<\/a>, litigation firm<\/a>, Metaverse Lawyer<\/a>, New FTX CEO<\/a>, Nishad Singh<\/a>, ryne miller<\/a>, S&C<\/a>, Sam Bankman-Fried<\/a>, sbf<\/a>, Sullivan Cromwell<\/a>, Twitter thread<\/a>, Web3 attorney<\/a>, Zoom presentation<\/a><\/div>\n<\/div>\n

What do you think about the appointment of Sullivan & Cromwell as debtors\u2019 counsel for FTX and the allegations of conflict of interest raised by former FTX US compliance officer Daniel Friedberg and James \u201cMetalawman\u201d Murphy? Share your thoughts in the comments below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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