Former FTX Attorney Opts to Hire Sullivan & Cromwell for Bankruptcy

Individual defendants have sought to delay an FTX hearing in the United States Bankruptcy Court in the district of Delaware scheduled for 10:00 am EST on January 20.

The trial is expected to address whether FTX can retain the services of New York law firm Sullivan & Cromwell (S&C) amid allegations from the United States Trustee that has also voiced opposition to the employment that claims conflicts of interest, in a January 13 legal filing.

FTX General Counsel Ryne Miller previously worked at S&C for eight years, said Trustee Andrew Vara, an official of the Department of Justice, adding that this disclosure is “the sufficient to determine whether the S&C satisfies the Bankruptcy Code’s requirement that there is no conflict and no interest.”

Defendants Warren Winter and Richard Brummond, however, filed an emergency motion Thursday to delay the trial in response to recent revelations from former FTX attorney Daniel Friedberg, who opposed the hiring of Sullivan & Cromwell citing similar conflicts.

Friedberg revealed that Miller told him “it was important to him (Miller) personally to handle more business at S&C because he wanted to return there as a partner after his career at the Debtors.”

Friedberg’s file also alleges that Mr. Miller said he had to get involved FTX.US a part of the loss because FTX.US had the cash to pay S&C to its depositor.

The complaint appears to have been made by the founder of the crypto exchange Sam Bankman-Fried last week. In a blog Bankman-Fried said that S&C’s relationship with FTX before the collapse was more than just a transaction, and that his staff had urged him to file for bankruptcy on November 11.

Friedberg also said that S&C has repeatedly refused to waive my attorney-client privilege in order to assist in law enforcement and that is “grossly inappropriate.”

Retaining the law firm is “necessary and in the best interest of the debtors and their estates and partners,” John Ray, appointed chief executive officer of FTX on November 11, said. which on the 21st of December. “S&C is one of the world’s leading law firms in all key areas of practice.”

In a new statement, John Ray said that if the retention of lawyers should be rejected “it is in the interest of creditors and creditors, as well as the state and federal regulators and lawyers of working with these advisors on a daily basis, it will be serious, if it cannot be fixed.”

The defendants requested that the trial, which should begin immediately, be postponed due to these “important, necessary circumstances.”

A spokesperson for S&C refers CoinDesk to Andrew Dietderich’s statement January 17 without further explanation.

Read more: DOJ Opposes Selection of FTX Lawyers, Discloses Conflict of Interest

UPDATE (Jan. 20, 2023, 14:00 UTC): Removed second “FTX” from title. Added response from Sullivan & Cromwell speakers.

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