By Michael Scott
Judges at the Delaware Bankruptcy Court have allowed Sullivan & Cromwell law firm to represent the embattled FTX in the ongoing court proceedings. The court decision has silenced the ongoing hearsays on the disqualification of Sullivan & Cromwell from representing FTX’s troubled borrowers, citing competing interests.
Sullivan & Cromwell to Face the Delaware Judges
On January 19, Sullivan & Cromwell interest in representing the now-defunct FTX debtors in court failed to show positive signs. The US Trustee and political leaders teamed up with a group of FTX customers to oppose the appointment of the White-Shoe legal entity.
They argued that the involvement of Sullivan &Cromwell (S&C) lawyers in the going bankruptcy charge would halt the efforts to refund the troubled FTX stakeholders.
Despite fierce opposition from the US crypto community, Dan Friedberg, FTX ex-compliance officer, was the last one on the list to issue a statement objecting to the appointment of Sullivan & Cromwell.
According to the January 12 report, Sullivan & Cromwell team was portrayed as Bankman-Fried’s closest ally. The report revealed that before the November scandal SBF had a previous engagement with the law firm.
A few years ago, the Bahamas crypto exchange approached the S&C for legal advice to settle 20 cases. At that time, FTX compensated the famous White-Shoe law firm over $8.5 million for the indispensable legal services.
The court also revealed that the FTX legal team comprising Ryne Miller and Tim Wilson had collaborated with Sullivan &Cromwell to deliver legal services.
Unexpected Court Ruling
Besides the ongoing speculation on Sullivan & Cromwell appointment, the opposition team failed to gather adequate evidence to convince the court otherwise.
In a report, John Dorsey, a judge at the bankruptcy court, argued that the law firm under scrutiny provided legal assistance before last year’s collapse of the Bahamas Crypto exchange. Dorsey also termed the declaration document from FTX ex-official Dan Friedberg as an “ex-parte letter” spreading rumors.
Also, failing to appear in court this week, Friedberg was denied an opportunity to participate in the upcoming zoom meeting.
Following the negative speculations, Sullivan & Cromwell confirms their disinterest in the FTX counsel role. The team confessed that it would neither dig deeper into any matter concerning its current operation nor its business partner. The firm also proposed that Los Angeles-based law firm Quinn Emanuel Urquhart & Sullivan proceed with the case.