The lawyer for FTX has accused Sam Bankman-Fried of trying to disrupt the bankruptcy process of the crypto empire through “attacks by Twitter”.
In the past few weeks, Bankman-Fried has in several tweets and blog posts accused Sullivan & Cromwell, the law firm representing FTX in the Chapter 11 process, of putting her under pressure to rush the company into bankruptcy, including the US arm of FTX, the former billionaire claims to be solvent. The company denies the claim.
James Bromley, a partner in Sullivan and Cromwell, said in a court hearing on Friday that the company “fights the ghost” to try to overcome Bankman-Fried’s public criticism of the role of the company representing FTX in the bankruptcy without being able to ask him. in court.
“One of the things that debtors in these cases generally face is Twitter attacks,” he said.
The comments came at a hearing where the bankruptcy court considered a motion by two FTX customers seeking to block Sullivan’s appointment due to what they claimed was a conflict of interest arising from the company’s past involvement with the crypto group.
The judge ultimately denied the motion. “There is no evidence of a real conflict here,” said judge John Dorsey.
The ruling paves the way for Sullivan to win millions of dollars in fees representing FTX as it tries to repay account holders. Dorsey noted FTX has hired another law firm that could be involved in the event of a conflict.
The hearing, and Bromley’s comments, show how the high-profile FTX case and the social media storm surrounding it will accelerate efforts to restructure crypto exchanges and recover money owed to millions of creditors.
Another former FTX insider, top lawyer Dan Friedberg, on Thursday pointed to new allegations against Sullivan about an alleged conflict of interest in a last-minute court filing ahead of the hearing. The judge described the submission as “hearsay, speculation and rumour” and “nothing I would consider to be evidence”.
Earlier this week, Sullivan filed dozens of pages detailing the nearly $10 million in legal work he did for Bankman-Fried’s company before it entered bankruptcy protection last year. Two of Sullivan’s former attorneys also hold senior legal positions at FTX.
Bromley on Friday said the company should have been more forthcoming from the start disclosing its past ties to the failed crypto group. “In retrospect, Your Honor, we should have gone further in the original statement,” he told the court.
He also claimed Bankman-Fried, who has pleaded not guilty to US fraud charges, and other insiders who “brought the company to its knees” were concerned about the information Sullivan provided to prosecutors and regulators.
“They can throw stones at debt counselors who give information to prosecutors,” he said.
The US Department of Justice disputed the company’s initial disclosure of its work for FTX, and requested more information. Attorneys for the government on Friday said they were satisfied with the additional details Sullivan provided.
Both Sullivan and Bankman-Fried declined to comment.