Bahamas court officials dropped their opposition to moving one piece of FTX’s restructuring case to a US court in Delaware, according to a court filing.
(Bloomberg) — Bahamas court officials dropped their opposition to moving one piece of FTX’s restructuring case to a US court in Delaware, according to a court filing.
Liquidators appointed in the Bahamas for one FTX affiliate agreed to move a case they filed in New York to Delaware, where more than 100 units are under the oversight of a federal judge, FTX lawyers said in papers filed in US Bankruptcy Court in Wilmington, Delaware.
The liquidators had filed a bankruptcy case in Manhattan, asking a federal judge there to officially recognize and support their restructuring case in the Bahamas.
That would have set up potentially contradictory court rulings from two different US judges handling different parts of Sam Bankman-Fried’s crypto empire.
The liquidators reserved their right to oppose any actions that FTX officials propose in the Delaware cases.
Restructuring advisers took over FTX after Bankman-Fried resigned as chief executive officer on Nov. 11. Since then, those advisers have accused him of trying to undermine their efforts in order to move assets away from a US court in favor of one in the Bahamas.
Last week, liquidators in the Bahamas moved to solidify control over the insolvency of FTX Digital Ltd., a subsidiary within Bankman-Fried’s crypto enterprise, bankruptcy court papers show.
They argued that account holders with assets in FTX’s custodial wallets are likely creditors of the Bahamian unit and are seeking to probe the rest of the crypto exchange’s corporate entities.
Under the proposed deal, liquidators will still be able to make those arguments, but any decisions would likely be made by US Bankruptcy Judge John Dorsey, who is overseeing the bulk of the FTX bankruptcy case.
A smaller FTX-related case is moving forward in the Bahamas under the control of the liquidators, who were appointed to find assets that can be used to repay creditors of FTX Digital.
The case is FTX Trading, 22-11068, US Bankruptcy Court, District of Delaware (Wilmington).
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