• FTX lawyers have filed three objections to the US Trustee’s motion for an Independent Examiner, citing cost inefficiency.
• The Department of Justice’s U.S. Trustee overseeing FTX’s bankruptcy case had requested the court to initiate an independent probe in early December.
• FTX lawyers have argued that an independent examiner could cost the bankrupt company up to $100 million and provide no unique content than the newly appointed CEO John J. Ray III.
The FTX bankruptcy case has stirred up much attention from U.S. lawmakers, several states, and regulatory agencies. In light of this, the Department of Justice’s U.S. Trustee overseeing FTX’s bankruptcy case requested the court to initiate an independent probe in early December. The Trustee argued that the FTX implosion was the fastest big corporate failure in American history and thus, an independent investigation was warranted.
However, FTX lawyers have vehemently objected to the formation of an independent examiner. They have argued that such an appointment would be cost-inefficient as it would likely cost the bankrupt company up to $100 million and provide no unique content than the newly appointed CEO John J. Ray III.
The lawyers filed three objections to the US Trustee’s motion for an Independent Examiner in order to demonstrate their opposition. They also highlighted an ironic situation during a recent hearing, wherein lawyers billing $2165 an hour were arguing that the cost of an Examiner’s services would be wasteful to the estate.
Regardless of the lawyers‘ objections, FTX creditors remain hopeful that an independent investigation can help to uncover the truth surrounding the case. The Trustee has yet to make a decision on the matter, and it is not yet known whether the Examiner will be approved or not. Nonetheless, the case has revealed the need for greater transparency and accountability in the financial services industry. In particular, the case has highlighted the need for companies to adhere to stringent corporate governance standards and to ensure that there is sufficient oversight to protect both the company and its creditors.
