Friday, September 22, 2023

FTX Bankruptcy Lawyer: Debtors Face ‘Twitter Attack’ Stemming From Sam Bankman-Fried


James Bromley, one of the attorneys representing debtors in the FTX bankruptcy case, criticized social media activity against his law firm that was fueled by posts from former CEO Sam Bankman-Fried.

in january. Hearing 20 in Delaware County, the attorneys addressed the motions addressing a potential conflict of interest between the Sullivan & Cromwell law firm charged with investigating the bankruptcy of FTX, the cryptocurrency exchange. Bromley, a partner at Sullivan & Cromwell, disputed the narrative that the law firm would not be able to act as an impartial auditor since it had previously provided legal services to FTX and one of its former partners, Ryne Miller, went on to become lead counsel to FTX US.

in january. On September 19, former FTX regulatory chief Daniel Friedberg filed a declaration with the court alleging that Miller wanted to lead the business to Sullivan & Cromwell, claiming he wanted to become a partner with the company after the bankruptcy case. Bromley argued in court that if a judge granted a deferral based on these allegations, the debtors would face “additional Twitter attacks” and similar filings would likely result in delays.

Friedberg signed the default bankruptcy proceedings, but was not allowed to speak due to not appearing in court in person. The judge ruled that there was no potential conflict of interest enough to prohibit Sullivan and Cromwell from continuing as debtors’ counsel.

“One of the things that debtors generally encounter in these cases is Twitter assault,” Bromley said. “It is very difficult, Mr. President, to screen a tweet, especially tweets from people under criminal indictment and with travel restrictions.”

Related: US lawmakers are asking the court to approve the “independent examiner” in the FTX bankruptcy case

Bromley later recalled that Friedberg and Bankman-Fried were using social media to “throw stones” at debtors to provide information to the authorities, with the announcement coming “hot on the heels of two very long, rambling tweets” from the SBF. He also noted that Bankman-Fried was “online immediately” to respond to a report in which CEO John Ray commented on the solvency of FTX and criticized information intended to provide transparency to debtors.

“Mr. Bankman-Fried is behind all of this, and whenever we are going to move this, wherever we are going to move him, there is in my mind an absolute certainty that he will try to do something to get in the way. He lashes out hard.”

At the time of publication, Bankman-Fried has not commented on the ruling, however Retweeted Speculation from others that Sullivan and Cromwell will continue to represent FTX debtors.