Mar 20, 2023
FTX Asks Judge to Block Bahamas Unit Liquidators From Its Assets
(Bloomberg) -- FTX Group is arguing that its property needs to be shielded from the liquidators in charge of winding down its Bahamas unit, insisting that they don’t have a rightful claim over any portion of the bankrupt firm’s assets.
As a result, the company is asking US Bankruptcy Judge John Dorsey to intervene, according to an adversary proceeding filed in bankruptcy court on Sunday. It wants Dorsey to assert that the assets Sam Bankman-Fried and other employees lodged under the Bahamas unit were “fraudulent transfers,” and therefore, rightfully owned by FTX.
Liquidators for the Bahamas division — which is known as FTX Digital Markets and is not bankrupt — have argued that the unit owns FTX.com’s property, the company said in court papers.
Lawyers representing FTX Group describe the Bahamas division as both an economic and legal “nullity” that was created as a “front to facilitate a conspiracy to defraud” the company’s customers.
The liquidators’ claims over the exchange continue to “balloon in size and volume,” according to the filing. And recently, they have gone a step further by threatening to get in the way of Alameda’s preferential payments.
Without an intervention from the US bankruptcy court, the Bahamas liquidators “will continue to assert baseless claims that will harm FTX.com customers and all other creditors of the FTX Debtors,” according to the filing.
The case is FTX Trading Ltd., 22-11068, US. Bankruptcy Court for the District of Delaware.
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