A U.S. Trustee has opposed FTX’s proposed sale of some of its solvent subsidiaries, including LedgerX, FTX Japan and FTX Europe.
According to a court filing reported by Reuters on Saturday, U.S. Trustee Andrew Vara filed an objection to a strategic sale of some FTX entities that was put forth by liquidators last month.
In a Dec. 15 motion, FTX liquidators asked a bankruptcy court to approve the sale of derivatives exchange LedgerX, as well as its Japanese and European subsidiaries, in order to recover value for shareholders. These assets were deemed to have solvent balance sheets in a strategic review of global assets conducted in November, but liquidators argued that a prolonged suspension of operations posed a risk to their value and functional licenses.
In his objection, Vara argued that the premature sale of these assets could hamper an investigation into potential misconduct in FTX’s people and entities.
“The sale of potentially valuable causes of action against the Debtors’ directors, officers and employees, or any other person or entity, should not be permitted until there has been a full and independent investigation into all persons and entities that may have been involved in any malfeasance, negligence or other actionable conduct,” he stated.
FTX’s liquidators had previously stated that these business units operated independently of their parent company. The liquidators claimed to have received an expression of interest from 111 parties, and have entered into confidentiality agreements with 26 of them.
Meanwhile, former FTX CEO Sam Bankman-Fried pleaded not guilty to the fraud charges against him in a hearing last week, despite contradictory testimony from his former colleagues Caroline Ellison and Gary Wang. In their own guilty pleas, both Ellison and Wang stated that they knowingly misled investors at the direction of Bankman-Fried.
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- Source: https://unchainedpodcast.com/us-trustee-objects-to-ftxs-plans-to-sell-business-units/