bankruptcy proceedings Archives

Millions Spent on FTX Lawyers and Calls for Staff Bonuses, as SBF Hints He May Want Trial Delayed

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Sam Bankman-Fried’s criminal trial might not be due to begin until later this year, but there’s no shortage of daily drama in the courtroom.

New details have emerged about how much money has been spent on legal services following FTX’s dramatic bankruptcy — as well as plans to pay millions of dollars in bonuses to key staff.

And if all that wasn’t enough, SBF’s legal team has indicated that October 2023 may be too soon for the trial to begin in Manhattan if the 30-year-old is to have enough time to prepare.

Let’s go through all of these developments in turn.

Documents filed in bankruptcy court show just how expensive bankruptcy proceedings can be.

Ever since FTX went under in November, law firms have been instructed to go through the exchange’s books with a fine tooth comb — all in the hope of uncovering the missing billions that are owed to customers. Meanwhile, new management has been brought

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March 13, 2023 by Justin B. Taylor ATTORNEY

Alex Jones Wants to Get $520,000 a Year in New Bankruptcy Plan

Conspiracy theorist Alex Jones filed for bankruptcy, but he wants to be paid $520,000 per year.
His company proposed that it would make $30 million annually from selling dietary supplements.
It also said it would keep around $560,000 for “executive incentive” bonuses every year.

Alex Jones’ media company has proposed a bankruptcy plan that would still allow him to be paid $520,000 per year.

This plan would also see the far-right conspiracy theorist and podcaster paying less than 4% of what he owes the families of the Sandy Hook victims, over the next five years.

Jones owes around $1.5 billion to the relatives of the Sandy Hook shooting victims. They sued him after he called the 2012 massacre a hoax and said the families of 20 murdered children were crisis actors.

Jones and his company, Free Speech Systems — which he fully owns — filed for bankruptcy separately in December and July, respectively.

As part of the bankruptcy proceedings, Free Speech Systems filed a reorganization proposal on Tuesday. In the proposal, the company said

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March 12, 2023 by Justin B. Taylor ATTORNEY

Texas, California, and New Jersey Join Call for Independent Examiner

A growing chorus of regulators wants an independent examiner appointed to review the financial statements, or lack thereof, in the FTX bankruptcy proceedings.

“Texas, among several other state and federal regulators, is currently investigating the Debtors and their related entities for violations in connection with their transaction of business in Texas and with Texas account holders,” wrote attorney Roma Desai on behalf of Texas Attorney General Ken Paxton.

The statement from the Texas attorney’s office follows similar motions from Wisconsin and Vermont regulators. The new court filing on Wednesday included letters of support from banking and securities officials in a handful of other states: Alaska; Arkansas; California; Florida; Hawaii; Idaho; Illinois; Kentucky; Maine, Maryland, New Hampshire, New Jersey, North Carolina, Oklahoma, Tennessee, and D.C..

If an examiner is appointed in the FTX case, it won’t be without some precedent.

Earlier this week the independent examiner who dug through bankrupt crypto lender Celsius released their 689-page report, concluding that problems at the company “dated back to at least 2020.”

The downfall of FTX

FTX and its related entities, including trading desk Alameda Research, filed for bankruptcy on November 11. Days later, newly appointed FTX CEO John Ray III,

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February 7, 2023 by Justin B. Taylor ATTORNEY

Bankruptcy Judge Says Celsius Crypto Investors Don’t Own Their Accounts

Celsius’ former CEO, Alex Mashinsky, speaking at a 2019 Bitcoin conference in San Francisco. Mashinsky stepped down in September 2022, amid Celsius’ bankruptcy proceedings. He’s being sued for allegedly misleading investors by New York’s AG.

A bankruptcy judge has dashed the dreams of investors hoping to retrieve their crypto funds from Celsius. It turns out, assets placed in the now-defunct crypto exchange’s high interest “Earn Accounts” belong to Celsius, not the account holders, according to a Wednesday ruling from Judge Martin Glenn.

The decision came down to an “unambiguous provision” in one section of Celsius’ terms of use, wrote the judge. “All right and title to such Eligible Digital Assets, including ownership rights,” is held by Celsius, said version 8 of the company’s terms, which 99.86% of Earn Account holders agreed to, noted Glenn. Celsius’ incredibly shady terms of service also stated to signatories that “you may not have any legal remedies or rights,” to get your money back—which the company has previously argued protects them from legal complaints.

In practice, Judge Glenn’s ruling effectively confirms that stance, and means the company has no immediate obligation to repay about 600,000 investors amid the

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January 15, 2023 by Justin B. Taylor ATTORNEY

Judge Approves Use of Independent Examiner in Crypto Lender Celsius’ Bankruptcy Case

A federal judge has granted a motion for the U.S. Trustee’s office to appoint an independent examiner to investigate crypto lender Celsius Network’s financial management that led the firm to file for bankruptcy earlier this summer.

U.S. bankruptcy Judge Martin Glenn ruled on Wednesday that the scope of the independent examiner would include an examination of several areas, including Celsius’ crypto holdings, why there was a change in account offerings from the Earn Program to the Custody Service for some customers while others were placed in a “Withhold Account,” Celsius’ procedures for paying various taxes and the current status of the utility obligations of Celsius’ mining business.

Celsius has laid out a proposal by which a still-being-built mining enterprise will allow it to generate enough revenue to continue operating.

Last week, Celsius and a group of its creditors agreed that an independent government examiner should investigate the firm as it moves through its bankruptcy proceedings. In August, the U.S. Trustee’s office, a Department of Justice entity tasked with monitoring bankruptcies, filed to appoint an independent examiner to investigate the company, saying its leadership had not been transparent about the actual financials.

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September 20, 2022 by Justin B. Taylor ATTORNEY

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bankruptcy proceedings

Millions Spent on FTX Lawyers and Calls for Staff Bonuses, as SBF Hints He May Want Trial Delayed

Alex Jones Wants to Get $520,000 a Year in New Bankruptcy Plan

Bankruptcy Judge Says Celsius Crypto Investors Don’t Own Their Accounts

Judge Approves Use of Independent Examiner in Crypto Lender Celsius’ Bankruptcy Case

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The downfall of FTX

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