FTX: U.S. trustee may appeal examiner appointment denial

By Sarah Lizee

Olympia, Wash., May 31 – The U.S. trustee overseeing FTX Trading Ltd.’s bankruptcy case may take his appeal to the U.S. Bankruptcy Court for the District of Delaware’s ruling denying the appointment of an independent examiner to the U.S. Court of Appeals for the Third Circuit.

Chief judge Colm Connolly for the U.S. District Court for the District of Delaware filed a memorandum opinion on Tuesday, questioning whether the bankruptcy court could lawfully reject the trustee’s request for the appointment of an examiner.

As previously reported, shortly after FTX filed bankruptcy, Regions 3 and 9 U.S. trustee Andrew R. Vara had filed a motion seeking an examiner to investigate the company’s “extraordinary collapse.”

The motion brought objections from FTX and the official committee of unsecured creditors, which argued that appointment of an examiner would not be appropriate in these cases.

Bankruptcy court judge John T. Dorsey said he agreed with the objectors and said appointing an examiner would likely cost more than $100 million, given the scope of the investigation that the U.S. trustee had requested. He added that creditors would be required to bear the burden of that cost.

FTX has headquarters in the Bahamas. The company filed Chapter 11 bankruptcy on Nov. 11, 2022 under case number 22-11068.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.