This article covers the latest developments in the FTX class action lawsuit, focusing on the efforts by lawyers to block Sullivan & Cromwell’s （S&C） dismissal motion.
Points
- FTX class action lawyers oppose S&C’s dismissal motion.
- S&C accused of facilitating FTX’s fraudulent activities.
- S&C defends its role, citing the Delaware Bankruptcy Court’s findings.
Legal Battle Overview
FTX class action lawyers have filed a motion opposing Sullivan & Cromwell’s effort to dismiss the lawsuit against them. The plaintiffs claim that Sullivan & Cromwell went beyond standard legal practices to actively facilitate FTX’s fraudulent activities. The law firm, also known as S&C, is overseeing the FTX bankruptcy proceedings and served as outside counsel to the exchange in several deals.
Response in Opposition to Motion. Source: PACER
S&C’s motion to dismiss argues that the suit is based on speculative allegations and lacks factual basis. The law firm cited its role in the FTX bankruptcy proceedings, noting that the Delaware Bankruptcy Court found S&C was a “disinterested party” in the bankruptcy case and asserting that FTX victims will be “paid in full.”
According to the motion opposing the dismissal, “neither of those reasons have anything to do with whether the MDL Plaintiffs state sufficient facts and allegations in the Complaint.”
In a previous statement to Cointelegraph, a spokesperson for S&C said it had “never served as primary outside counsel to any FTX entity” and had a “limited and largely transactional relationship with FTX and certain affiliates prior to the bankruptcy.”
The FTX-S&C Relationship
According to the plaintiffs, the relationship between FTX and S&C was initiated by Ryne Miller, a former S&C partner who became FTX’s general counsel in August 2021.
“Mr. Miller told me that it was very important for him to direct a lot of business to S&C because he wanted to rejoin them as a partner after his time with the Debtors.”
S&C was directly involved in FTX’s acquisition of LedgerX and Voyager Digital. In November 2022, the exchange filed for bankruptcy protection following a bank run.
“S&C involvement with FTX has drawn scrutiny from Senators, FTX Insiders and the US Bankruptcy Trustee, Professor Lipson and FTX customers,” told Cointelegraph FTX creditor Sunil Kavuri. “There are pending lawsuits that S&C filed the bankruptcy without proper authority,” he added.
Key Takeaways
- FTX class action lawyers are actively opposing S&C’s motion to dismiss the lawsuit.
- Plaintiffs accuse S&C of facilitating FTX’s fraudulent activities beyond standard legal practices.
- S&C defends its actions, citing the Delaware Bankruptcy Court’s findings and its limited relationship with FTX.
解説
- Legal Implications: The ongoing legal battle between FTX class action lawyers and Sullivan & Cromwell highlights the complexities of bankruptcy proceedings and the role of legal advisors. The outcome of this case could set a precedent for future litigation involving similar allegations.
- Stakeholder Interests: The plaintiffs’ accusations against S&C underscore the importance of scrutinizing the actions of legal firms involved in high-profile bankruptcy cases. Ensuring that legal advisors adhere to ethical standards is crucial for maintaining trust in the legal system.
- Bankruptcy Proceedings: The Delaware Bankruptcy Court’s findings regarding S&C’s role as a “disinterested party” will play a significant role in determining the validity of the plaintiffs’ claims. This case emphasizes the need for transparency and accountability in bankruptcy proceedings.