The U.S. Trustee has voiced objections to FTX hiring New York law firm Sullivan and Cromwell, claiming potential conflicts of interest due to its previous extensive, in a Jan. 13 legal filing.
The complaint echoes those made by a bipartisan grouping of U.S. Senators and by the crypto exchange’s founder Sam Bankman-Fried, and expresses concern the firm might tread on the toes of future work by an independent examiner.
“S&C’s disclosures as filed are wholly insufficient to evaluate whether S&C satisfies the Bankruptcy Code’s conflict-free and disinterestedness standards,” said Trustee Andrew Vara, a Department of Justice official responsible for bankruptcy cases. “The incomplete disclosures are a sufficient and independent reason to deny the application.”
“Any investigation led by S&C would be duplicative and wasteful of estate resources if the Court were to grant the U.S. Trustee’s pending motion to appoint an examiner with a comprehensive investigative mandate,” Vara added.
FTX’s General Counsel Ryne Miller previously worked at S&C for eight years, Vara noted, and the law firm might find itself in the “conflicted position” of investigating both itself and its former staffer.
All Comments