John Dorsey, a bankruptcy judge, approved Friday’s appointment of Sullivan & Cromwell (S&C), to serve as debtors counsel for FTX. This was despite Daniel Friedberg’s objection. Friedberg is a former FTX US compliance officers. Friedberg, who was presenting during a Zoom presentation, claimed that there was a conflict between the current and former FTX executives as well as FTX US general counsel. Ryne Miller had previously worked for S&C. Judge Dorsey was not convinced by Friedberg’s 17 page objection and appointed S&C. He stated that there is no evidence of conflict.
FTX Bankruptcy Raised Questions about Conflict of Interest and Odd Decisions
John Dorsey, a bankruptcy judge, approved Sullivan & Cromwell (S&C), to be the legal counsel for the debtors. James Murphy, “Metalawman” Published a Twitter thread Explain. It was strange that S&C would be selected for FTX representation. Murphy stated in his post that “there’s something wrong with the FTX bankruptcy.” Murphy, an attorney who specializes on metaverse, Web3 and digital asset subjects, questioned John J. Ray III’s involvement in the process. He is the new CEO of FTX and chief restructuring officer.
Murphy, an attorney, points out that Ray was the chief restructuring officer at Enron and did a great job of aggressively seeking recoveries to the benefit Enron’s creditors. Murphy disagrees. Ray’s behavior is very different from that of the hard-bargaining CEO at Enron. The metaverse lawyer questioned this shift in attitude. The metaverse lawyer explained that Ray did not suggest that Enron’s primary outside legal firms should be the debtor’s counsel when he was restructuring Enron.
Murphy stated that Mr. Ray supports S&C’s move as debtors counsel. Not noted. Further, the lawyer stated that S&C handled “20 engagements for FTX within just 16 months,” was “paid $8.5million in fees” and “representing key figures.” [Sam Bankman-Fried] And [Nishad Singh] Murphy said that Ray at Enron “aggressively pursued claims towards Enron’s law firms outside of Enron.” continued:
Vinson & Elkins settled for $30 million, while Andrews Kurth received $18.5 million. Independent research shows that these companies failed to address red flags indicating possible misconduct.
Murphy, too Opinion The irony of this situation, however, is that the huge fees will be paid the victims of the FTX fraud — customers. Murphy stated, “My prediction: Mr. Ray and the Official Creditors Committee will prevail. The judge will appoint Sullivan & Cromwell creditors’ counsel… This does not seem normal.” Daniel Friedberg, a former FTX compliance officer in the US, was present at the hearing. Objected S&C was appointed, and the former FTX US compliance officer submitted a 17-page objection to the bankruptcy judge for review. The filing stated that Ryne Miller was FTX’s general counsel. Once employed by S&C.
“Mr. “Mr. Despite this objection, Bankruptcy Judge Dorsey stated to court participants that there was no evidence of actual conflict. He also said that it was “hearsay,” innuendo and speculation, rumors, but that it was not something I would allow into evidence.
James Murphy, also known as “Metalawman”, added his thoughts on the appointment of S&C as debtors’ counsel. “As expected the judge approves Sullivan & Cromwell debtors’ counsel. Murphy stated that Judge Murphy does not seem to be concerned about S&C conflicts. Submitted. “Any suspense over this decision was ended when the U.S. “Any suspense about this decision was eliminated when the U.S.
What do you think of the appointment of Sullivan & Cromwell to be FTX’s debtors’ counsel and the conflict of interest allegations made by James “Metalawman”, Murphy, former FTX US compliance officer? Comment below to share your thoughts.