September 2023

The Lawyers Sam Bankman-Fried Once Trusted Are Drawing Criticism

Just before FTX collapsed in November, one of its outside lawyers at the law firm Sullivan & Cromwell emailed a colleague at another firm, insisting that the cryptocurrency exchange’s finances were stable.

Rumors of FTX’s demise were “silliness,” the lawyer, Andrew Dietderich, wrote. “FTX is rock solid, doesn’t use customer funds or take credit risk at all,” he said.

Four days later, FTX filed for bankruptcy. Mr. Dietderich quickly arranged for Sam Bankman-Fried, the exchange’s founder, to step down so that a new chief executive, John Jay Ray III, a specialist in corporate turnarounds, could lead the company. When Mr. Ray needed lawyers to manage the bankruptcy, a lucrative assignment, he asked a judge to appoint the same ones who had helped get him the job: Sullivan & Cromwell.

Now, with Mr. Bankman-Fried set to go on trial next month on fraud charges stemming from FTX’s failure, Sullivan & Cromwell’s tangled history with the exchange is drawing scrutiny — especially from Mr. Bankman-Fried’s lawyers and family.

For months, Mr. Bankman-Fried has attacked Sullivan & Cromwell in court papers and on social media, arguing that the firm’s lawyers set him up as the fall guy for FTX’s implosion while downplaying their

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Unclaimed Funds Pose Profit Potential For Bittrex’s Bankruptcy

(MENAFN- CoinXposure) Bittrex, which filed for bankruptcy in May, may still be profitable because consumers are not claiming their funds .

The U.S. Secret Service was a significant patron, with millions in the cryptocurrency exchange.

Most crypto bankruptcies are tales of anguish and loss: Anguished ex-customers of FTX or Celssign up and hope to recover a portion of their holdings one day.

Not so for Bittrex’s U.S. subsidiary, which is having trouble convincing over a million creditors to shut up and accept their money, potentially resulting in a profitable Chapter 11 bankruptcy estate.

Since May, and now that the deadline for filing a claim has passed, just under 36,000 customers have withdrawn approximately $143 million worth of cryptocurrency , the company’s attorney told a Delaware court Wednesday.

After the company’s U.S. and Maltese branches filed for bankruptcy in May, emails were sent to a small portion of its 1.6 million customers, imploring them to withdraw.

“One of the questions we wanted to answer was why our participation rates are so low,” Tomasaid, adding that some customers may have been reluctant to provide the additional personal information required for anti-money laundering checks to claim a relatively modest amount.

They are

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Five questions ahead of decisive Yellow bankruptcy hearing

Executives, attorneys, creditors, and many others invested in the wind-down of Yellow Corp. will gather Sept. 15 for a key hearing in U.S. Bankruptcy Court in Delaware that should answer several questions about how the shuttered carrier’s case and auctions of substantial assets will proceed in the coming weeks.

The hearing could add clarity to some important questions in Yellow’s filing and perhaps reveal bidders who haven’t yet gone public with their interest in what remains of the almost 100-year-old company.

Here’s the latest on the Chapter 11 case for what was, until last month, the No. 6 carrier on the 2023 for-hire FleetOwner 500:

  • The Sept. 15 hearing is slated to cover a lot of ground. Among the most important items before Judge Craig T. Goldblatt is final approval of the $142 million in debtor-in-possession (DIP) financing Yellow has secured from hedge funds Citadel and MFN Partners (the latter being Yellow’s largest shareholder, having amassed a 42% stake this summer) as well as the procedures that will govern the auction of the defunct company’s assets planned for next month.
  • Also on the provisional agenda is finalization of a motion, preliminarily approved by Goldblatt on Sept. 8, to make about
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Mercy arranging tours for potential bidders in its bankruptcy sale

Mercy Iowa City is shown Aug. 7 in Iowa City. in Iowa City,. The hospital, now in bankruptcy, has arranged tours of its health care facilities next week for potential bidders interested in competing for its assets against the University of Iowa. (Jim Slosiarek/The Gazette)
Mercy Iowa City is shown Aug. 7 in Iowa City. in Iowa City. The hospital, now in bankruptcy, has arranged tours of its health care facilities next week for potential bidders interested in competing for its assets against the University of Iowa. (Jim Slosiarek/The Gazette)

IOWA CITY — Mercy Iowa City has arranged tours of its health care facilities next week for potential bidders interested in competing for its assets against the University of Iowa — which last month made an initial “stalking horse” bid of $20 million to buy the 150-year-old community hospital.

During a hearing Wednesday in U.S. Bankruptcy Court — following Mercy’s Aug. 7 filing for Chapter 11 protection — attorney Felicia Perlman, representing Mercy through her Chicago firm, McDermott Will & Emery, said, “We do have several parties who have signed (nondisclosure agreements) and are active in the data room, and we are providing diligence to and these tours for.”

“We’ll know more whether they are likely to be real bidders or whether they lose interest,” Perlman told Judge Thad Collins in response to his request for a status update.

She reported active recruitment and outreach to any individuals or entities that have expressed interest.


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Not a bribe, Modesto company’s lawyer says of job offer, $150,000 check for hospital CEO

Addressing a federal judge, a lawyer representing a Modesto-based hospital management company stressed that his client back in May wasn’t trying to “bribe” a Central San Joaquin Valley hospital executive when they handed her a $150,000 check and a job offer amid negotiations.

Hamid Rafatjoo, a partner with Raines Feldman Littrell LLP and lawyer for American Advanced Management Inc., told U.S. Judge René Lastreto II over Zoom in court on Tuesday that his client wasn’t trying to gain competitive advantage in a bidding process to take over operations of bankrupt Madera Community Hospital.

“Obviously, there were better ways of handling that process,” Rafatjoo said, “but it didn’t come from a place of trying to bribe anyone.”

“My client did what it did,” he said, adding that the actions took place before he was retained.

A business law expert contacted by The Bee said there was nothing illegal about the offer, though it looks “irregular” and “awkward” and the circumstances suggest it should have been fully disclosed in bankruptcy court.

Rafatjoo also took the opportunity Tuesday to tell the judge that AAMI’s offer to take over operations of Madera Community Hospital was superior to the current proposed partner and that it

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