by Pam Martens and Russ Martens at Wall Street on Parade
A showdown in the Delaware bankruptcy proceedings for Sam Bankman-Fried’s collapsed crypto exchange, FTX, before presiding Judge John Dorsey is scheduled for next Monday morning at 9:30. (You can listen to the hearing live at this link. Just turn on your speakers and click on the box with the flag.) The battle lines have been drawn for the showdown – but not in the manner that Big Law firm, Sullivan & Cromwell, had hoped.
The U.S. Trustee, who represents the U.S. Department of Justice in bankruptcy cases, has been asking Judge Dorsey to agree to the appointment of an independent examiner in the case since December 1. And over the presiding two months, the deeply conflicted Sullivan & Cromwell law firm has been aggressively opposing the U.S. Trustee’s pursuit of an independent examiner.
Yesterday, a Joinder was filed by the securities regulator of Texas, supporting the motion by the U.S. Trustee. The joinder included letters from 15 other state securities regulators and Washington, D.C., also supporting the appointment of an independent examiner. The states included the three largest U.S. states by population: California, Texas and Florida. The states of Wisconsin and Vermont had previously filed their own joinders requesting the appointment of an independent examiner, meaning that the position of the U.S. Trustee is currently being advocated by 18 state securities regulators and the District of Columbia.
In the joinder filed by Wisconsin’s Attorney General and state securities regulator on December 21, it made the following points:…Continue Reading