By
Chimamanda U. Martha
April 19th, 2024
FTX debtors have prioritized selling four businesses owned by the company, however, the US bankruptcy trustee in FTX’s case has argued that FTX has provided very little information on what’s actually being sold.
In the new legal filing of FTX’s bankruptcy case, more than 117 buyers have shown interest in purchasing the assets and businesses of the crypto exchange FTX. It’s almost two months since crypto exchange FTX filed for bankruptcy in November 2022.
The crypto exchange’s bankruptcy filing includes more than 100 entities. As per the previous reports, FTX owes a total of $3.1 billion to its top 50 creditors. In this bankruptcy process, lawyers who are representing the FTX debtors have prioritized selling four businesses which include LedgerX, Embed, FTX Japan, and FTX Europe.
In a legal filing on Sunday, January 8, attorney Kevin Cofsky noted that all these four entities are relatively independent of FTX and their value could decrease during the bankruptcy case if not sold. Cofsky is currently a partner at investment bank Perella Weinberg Partner, which represents FTX US and other affiliate firms that have filed for bankruptcy protection.
Although 117 entities have shown interest, none of them have put in a firm offer to date. The debtors, however, have entered into a confidentiality agreement with 59 of these entities. As per the latest situation, 50 parties have shown interest in Embed, other 56 parties have shown interest in LedgerX, 41 have shown interest in FTX Japan, and 40 have shown interest in FTX Europe.
The initial hearing for the sales shall happen on Wednesday, January 11, However, the number of interested parties and other moving parts could affect the timing of the bankruptcy proceedings.
Why Selling These FTX Businesses Is an Uphill Task
In the filing over the last weekend, Andrew Vara, the US bankruptcy trustee in FTX’s case, argued that the crypto exchange has provided very little information on what is being sold. For each of the four entities, Vara said that crypto exchange FTX hasn’t outlined the financial affairs including assets and liabilities.
Vara said:
“Without these filings, there is no information regarding the nature or value assets of the Debtors whose businesses the Debtors seek to sell”.
He further called for an independent investigation into the businesses before selling them. Vara said that “there is a serious concern” about these entities being involved in FTX’s bankruptcy and holding-related information. He added:
“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 when there has been serious allegations of wrongdoing, and no investigation yet into the scope of such wrongdoing, or the persons and entities that may have been involved”.
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