FTX Chapter 11 trustee: Will Delaware bankruptcy court cut short John J Ray III’s reign at stricken crypto exchange?
When Sam Bakman-Fried (SBF) stepped down as chief executive of the now-collapsed cryptocurrency platform FTX, he handed the reigns of the stricken company over to John Jay Ray III.
But could the US Bankruptcy Court for the District of Delaware halt the new CEO’s short tenure?
FTX token (FTT) to US Dollar
FTX, its sister firm Alameda Research and 134 affiliated companies, filed for Chapter 11 bankruptcy on 11 November following a week of struggles to satisfy their clients’ withdrawal requests.
Ray, FTX’s new CEO, was previously chief executive and then chairman at the energy trading company Enron, which famously collapsed in 2001.
The media have hailed the Wall Street lawyer for having a “reputation for boosting creditor recoveries”.
An attorney, who represented the Enron entity charged with recovering money for creditors, spoke to Reuters about Ray’s uncompromising practises. Attorney John Delnero said:
But according to The Financial Times, FTX has been searching for experienced directors in bankruptcy cases to be put in charge of FTX.
This may be an “attempt to show the court that the company is capable of managing the process itself in order to maximise recoveries for creditors, said a person briefed on the reasons for the move,” reported the FT.
It may also minimise the chances that the court could appoint an independent “Chapter 11 trustee” who would replace Ray to manage FTX – a move typically made by US bankruptcy judges who believe control of the business should be taken away from the company itself, the FT pointed out.
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