In the words of Judge Dorsey, “Given the facts and circumstances of this highly unique case, I have no doubt that the appointment of an examiner would not be in the best interest of the creditors.”
John Dorsey, the federal judge overseeing the FTX bankruptcy case, denied US Trustee Andrew Vara’s motion to appoint an independent examiner to investigate FTX’s collapse.
Judge Dorsey noted that hiring a third-party investigator will increase the burden on the bankrupt exchange’s creditors. According to him,
“There’s no question that if an examiner is appointed here, the cost of the examination given the scope suggested by the Trustee at the hearing, would be in the tens of millions of dollars, and would likely exceed one hundred million dollars.”
His ruling was synonymous with earlier comments by FTX attorneys who claimed that the firm did not own enough funds to repay its creditors.
In the same hearing, the judge voiced his support for appointing a fee examiner to oversee the litigation expenses incurred by FTX.
He also expressed his faith in FTX’s current CEO, John Ray III, adding,
“[John Ray was] completely independent of prior management and the companies he was appointed to lead.”
The news follows an earlier development in December 2022 when Andrew Vara requested the court to hire a third-party examiner to look into the activities that led to FTX’s collapse.
Meanwhile, FTX’s new management seeks to claw back $400M from Modula Capital, a crypto investment firm.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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