• FTX lawyers have objected to the US Trustee’s motion requesting the court to initiate an independent probe in the FTX bankruptcy case.
• The lawyers have argued that the cost of an independent examiner could be up to $100 million and would not provide any unique content than the newly appointed CEO John J. Ray III.
• The lawyers implied that such a cost would not provide the much-needed answer to creditors who have lost billions in the FTX scuffle.
FTX, a major US-based cryptocurrency exchange, recently imploded in what has been deemed the fastest big corporate failure in American history. The implosion has attracted the attention of U.S. lawmakers, several states, and regulatory agencies. In response, the Department of Justice’s U.S. Trustee overseeing FTX’s bankruptcy case requested the court to initiate an independent probe in early December.
However, FTX lawyers have vehemently objected to the formation of an independent examiner. The lawyers argued that the cost of such an examiner could be up to $100 million and would not provide any unique content than the newly appointed CEO John J. Ray III. According to the lawyers, an independent examiner could cost the bankrupt company up to $100 million and provide no unique content than the newly appointed CEO John J. Ray III.
The lawyers implied in a recent hearing that such a cost would not provide the much-needed answer to creditors who have lost billions in the FTX scuffle. The creditors committee, the FTX debtors, and the Bahamas Team (JPL) have all filed three objections to the US Trustee’s motion citing cost inefficiency.
The FTX lawyers argued that an independent examiner would be an unnecessary and expensive endeavor, and it would be more prudent to rely on the newly appointed CEO, John J. Ray III, to lead the investigation. Despite the objections, the court will ultimately decide whether or not to appoint an independent examiner.
The ongoing FTX bankruptcy case is being closely monitored by U.S. lawmakers, several states, and regulatory agencies. The creditors committee, the FTX debtors, and the Bahamas Team (JPL) have all expressed their desire for an independent probe as soon as possible. It remains to be seen whether the court will side with the FTX lawyers and reject the US Trustee’s motion, or if the court will take the initiative and appoint an independent examiner to investigate the matter.