FTX Bankruptcy Court Won’t Undo Automatic Freeze With Bahamas Liquidator
- FTX’s creditors’ committee said the Court refused to rescind the automatic asset freeze orders of Bahamas liquidators.
- In its ruling, the Court emphasized that the most important considerations were to maximize capital recovery and return funds to creditors and customers.
- The bankruptcy court also launched a joint motion by the debtor and creditor committee to seal customer data.
FTX’s official committee of unsecured creditors tweeted that from June 8 to 9, the bankruptcy court held hearings on two issues in the FTX bankruptcy case: proceedings in the Bahamas and petitions to preserve customer information.
On June 9, Delaware Judge John Dorsey dismissed the Bahamas Joint Temporary Liquidation Organization (JPL) petition to lift the automatic freeze order. Judge Delaware added that his primary concern is maximizing the value of recovery for FTX’s creditors and customers worldwide. Bahamian liquidators have received 46 million claims alone, and having similar matters litigated before him and Sir Ian in the Bahamas would inevitably involve increased costs, “confusion” and delays with all costs ultimately paid by Cryptocurrency exchange customers crashed.
For Bahamian liquidators concerned that freezing Chapter 11 would prevent them from performing their legal obligations before the Supreme Court. However, while the ruling appears to be a total loss for the Bahamian liquidation trio, Tribune Business understands they have been greatly encouraged and comforted by various aspects of Judge Dorsey’s ruling.
Judge Dorsey ruled that serious legal issues needed to be determined before the assets could be distributed and returned to FTX’s creditors. These include who are clients of FTX Trading and other entities controlled by Mr. Ray and who are clients of FTX Digital Markets in the Bahamas.
The Court also directs the parties to mediate on matters brought up by the joint liquidators. FTX Creditors Committee will participate in mediation and protect the interests of creditors and customers. The bankruptcy court also launched a joint motion by the debtor and creditor committee to seal customer data.
In the remaining bankruptcy cases, the names, email addresses, and physical addresses of the natural customers will be permanently deleted. This will protect customers from the risk of scams and other threats. Business customer names, email addresses, and addresses will be deleted within 90 days, possibly with extensions.
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