FTX indemnifies $12 million as security before filing for its Bankruptcy

• FTX paid its lawyers a whopping $12 million as a retainer to its Chapter 11 bankruptcy proceedings.
• District Judge Ronnie Abrams steps down from the FTX case.

The FTX crypto exchange became obsolete after its sister company Alameda Research had its felonious hands over the FTX Users’ funds. FTX along with its 130 more affiliated companies commenced their voluntary chapter 11 under the U.S. Bankruptcy code. 

According to the U.S. District Court, the debtors (FTX) paid $12 million as a security deposit to Sullivan & Cromwell LLP (S&C), a New York City-based law firm. This amount is paid as a retainer to address their fee payments and expenses. Furthermore, the Court ordered that the S&C will hold the unused balance as an evergreen retainer throughout this case until its reimbursement of expenses at the end of chapter 11.

FTX’s chapter 11 in an unexpected turn

District, Judge Ronnie Abrams has relieved herself from the FTX’s proceedings as Davis Polk & Wardwell LLP, a law firm where her husband is a partner, had advised FTX in 2021. She also emphasized that the said law firm had advised other representing parties that may be unpropitious to the defendant Samuel Bankman-Friend (SBF). 

She further confirmed that her husband had no involvement in any of these representations. Following this, she stated that these matters are confidential and are unknown to the Court.

Abrams finally enclosed that 

“Nonetheless, to avoid any possible conflict, or the appearance of one, the Court hereby recuses itself from this action”

Case 1:22-cr-00673-RA Document 23 Filed 12/23/22 Page 1 of 1

The Court has summoned the Defendants on their next hearing date which is on January 11, 2023, while extending their Objection deadline only until January 4, 2023.