James Bromley, one of the lawyers representing debtors in the FTX bankruptcy case, has criticized social media activity against his firm promulgated by posts by former CEO Sam Bankman-Fried.
At a hearing on Jan. 20 in the District of Delaware, the attorneys discussed motions regarding potential conflicts of interest between Sullivan & Cromwell, the law firm investigating FTX’s bankruptcy, and the exchange. Bromley, a partner at Sullivan & Cromwell, objected to the idea that the law firm could not act as a disinterested reviewer, given that it had previously provided legal services to FTX and one of its former partners, Ryne Miller, went on to become the lead attorney for FTX US.
On January 19, former FTX chief regulatory officer Daniel Friedberg filed a plea with the court alleging that Miller wanted to do business with Sullivan & Cromwell, claiming he wanted to become a partner in the firm following the bankruptcy case. . Bromley argued in court that if the judge granted a stay based on these allegations, the debtors would face “additional Twitter attacks” and similar filings that would likely cause delays.
Friedberg signed on to the virtual bankruptcy proceeding, but was not allowed to speak because he did not appear in person in court. The judge ruled that there were no potential conflicts of interest that would prevent Sullivan & Cromwell from continuing to act as counsel for the debtors.
“One of the things that debtors have generally dealt with in these cases is Twitter assault,” Bromley said. “It is very difficult, Your Honor, to cross-examine a tweet, particularly tweets that are being issued by individuals who are under criminal indictment and whose travel is restricted.”
Bromley later suggested that Friedberg and Bankman-Fried had been using social media to attack debtors for providing information to authorities, and that the statement came “just after two very long, whiny tweets” from Sam Bankman-Fried. He also noted that Bankman-Fried was “immediately online” to respond to a report in which Chief Executive Officer John Ray commented on FTX’s creditworthiness and had criticized information intended to provide transparency for debtors.
“Mr. Bankman-Fried is behind all of this, and whenever we were going to move this forward, wherever we took him, there’s an absolute certainty in my mind that he’s going to try to do something to get in the way. He’s lashing out.”
At the time of publication, Bankman-Fried had not commented on the ruling, but retweeted speculation by others that Sullivan & Cromwell would continue to represent FTX debtors.
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