The FTX bankruptcy case has attracted the attention of U.S. lawmakers, several states, and regulatory agencies. In the latest update, FTX debtors, the creditors committee, and the Bahamas Team (JPL) filed three objections to the US Trustee’s motion for an Independent Examiner.
Calling the FTX implosion the fastest big corporate failure in American history, the Department of Justice’s U.S. Trustee overseeing FTX’s bankruptcy case requested the court to initiate an independent probe in early December.
However, FTX lawyers have vehemently objected to the formation of an independent examiner citing cost inefficiency. According to the lawyers, 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.
As a result, the lawyers implied in a recent hearing that the cost would not provide the much-needed answer to creditors who have lost billions in the FTX scuffle.
“The appointment of an examiner, with a mandate to be determined, can be expected to cost these estates in the tens of millions of dollars. Indeed, if history is a guide, the cost could near or exceed $100 million,” the lawyers argued.
FTX Implosion Implores More Pain In Crypto Market Ahead
The FTX and Alameda bankruptcy case is in the third month and the creditors may have to wait much longer to get needed answers. FTX mastermind SBF is expected to return for a hearing in October. Meanwhile, FTX acting CEO Ray recently said in a hearing that crypto wallet keys are missing, which may take a lot of time and effort to unravel.
As such, companies like Genesis Trading which owes Gemini Earn customers over $900 million could wait much longer for a reimbursement.
Source: https://coinpedia.org/news/ftx-lawyers-object-to-the-formation-of-an-independent-examiner-citing-unwarranted-cost/