FTX bankruptcy judge denies US Trustee’s motion to appoint independent examiner
The U.S. Trustee made arguments including that an examiner was necessary to scrutinize the use of software to conceal FTX’s alleged misuse of customer funds.
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Judge John Dorsey of the United States Bankruptcy Court for the District of Delaware has denied a motion appointing an independent examiner for FTX.
In a Feb. 15 hearing, Judge Dorsey said he had some discretion under the law to choose whether to appoint an examiner in the FTX bankruptcy case despite some of the the parties meeting the debt threshold with the loss of funds. According to the judge, appointing an examiner would be an “unnecessary burden” on FTX’s debtors and creditors. He also cited CEO John Ray’s experience under similar circumstances.
“There’s no question that if an examiner is appointed here, the cost of the examination, given the scope suggested by the Trustee at the hearing, would be in the tens of millions of dollars, and would likely exceed one hundred million dollars,” said Dorsey. “Given the facts and circumstances of this highly unique case, I have no doubt that the appointment of an examiner would not be in the best interest of the creditors.”
This story is developing and will be updated.
