FTX Update: First hearing details, Bahamas liquidators agree to transfer the case to the United States

The US bankruptcy court held the first hearing for FTX, similar to the bankruptcy liquidation of Three Arrows Capital and Celsius, which is expected to be a lengthy process. The good news is that, along with yesterday's report, the Bahamian court and the appointed liquidator have agreed to transfer the case to be adjudicated in the US.

FTX Receives Court Approval for First-Day Motions

FTX Trading and approximately 101 affiliated entities (collectively referred to as FTX Debtors) announced that the U.S. Bankruptcy Court for the District of Delaware has granted interim and final approval of all "first-day" motions related to the Chapter 11 bankruptcy filing submitted by FTX Debtors on November 11, 2022.

Newly appointed CEO of FTX, John J. Ray III, stated:

"Following the court's approval of the 'first-day' motions, we are moving quickly to advance our work in order to maximize value for all FTX stakeholders. We will continue to implement necessary controls and organize the company's assets. As we review our business, we have begun to receive interest from potential buyers for our assets, and we will proceed with a structured process to restructure or sell FTX assets around the world for the benefit of stakeholders."

U.S. Bankruptcy Judge Allows FTX's 50 Largest Creditors to Remain Anonymous

Bloomberg reported that U.S. Bankruptcy Judge John Dorsey ruled during FTX's first court hearing on Tuesday to allow the 50 largest creditors of FTX to remain anonymous while still participating in the company's bankruptcy proceedings.

U.S. bankruptcy law typically requires names to be filed in publicly accessible documents. FTX's representatives argued that these creditors are also customers, and disclosing information would expose their business to competitors.

Dorsey agreed to hold a hearing next month to give opponents, including the U.S. Trustee for bankruptcy cases, an opportunity to persuade him to disclose these names.

FTX Latest Legal Filing: Reveals Top 50 Creditors, Totaling Nearly $3.1 Billion

Bahamas FTX Liquidators Agree to Transfer Bankruptcy Case to Delaware, USA

CoinDesk reported that James Bromley, a partner in the Financial and Reorganization Group at law firm Sullivan & Cromwell, stated during the first FTX bankruptcy hearing on Tuesday that the FTX liquidators appointed by the Bahamas court have agreed to transfer the relevant case they initiated in New York to Delaware.

James Bromley stated:

"However, evidence in FTX's opposition to the liquidators' complaint suggests that after FTX filed for bankruptcy, the Bahamian government directed unauthorized access to FTX assets. FTX holds evidence that assets have been moved from the debtors' property to the Bahamas, and the Bahamian government has made some ambiguous comments about actions they have taken regarding certain assets."

The Bahamas Securities Commission announced last week that it had ordered the assets in FTX's crypto wallets to be transferred to government-controlled wallets.

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