The Tribune

By YOURI KEMP

Tribune Business

Reporter

ykemp@tribunemedia.net

THE Joint Provisional Liquidators (JPL) appointed after the collapse of the FTX crypto-exchange are arguing in court in the US that any sale or auction of assets should be reserved for any of the Bahamian company’s rights.

Brian Simms KC, the Lennox Paton senior partner, and the PricewaterhouseCoopers (PwC) accounting duo of Kevin Cambridge and Peter Greaves, made the argument in recent court documents to the district court in Delaware.

The JPLs are arguing that FTX’s new chief executive, John Ray, is rushing the process of selling off all of FTX’s assets without exploring all of the businesses interests that FTX has and not, instead, seeing the virtue in the restructuring process of the company, where they believe more value would be found for persons who are owed by the company.

The court documents also said: “While the Chapter 11 Debtors are apparently comfortable that now is the time to monetize certain assets that are part of the international FTX. com platform, the Foreign Representatives – operating in the dark without access to their own information – are unable to assess that decision. Despite multiple requests and good faith efforts to compromise by the Foreign Representatives, the Chapter 11 Debtors continue to deny the Foreign Representatives access to the Chapter 15 Debtor’s own information. The Foreign Representatives have court-appointed duties to protect, investigate, and evaluate the Chapter 15 Debtor’s estate under Bahamian law for the benefit of its creditors.”

It continued, “By the Chapter 11 Debtors’ design, the Foreign Representatives have been unable to fulfill these duties generally, and here specifically in order to properly evaluate the Bidding Procedures Motion. In short, there is a disconnect between the Chapter 11 Debtors’ public statements and the immediacy of the relief sought in the Bidding Procedures Motion, and the Foreign Representatives believe that information currently withheld may shed light on infirmities in the proposed process. A full and fair opportunity for the Foreign Representatives to evaluate what is purportedly being sold, and who actually owns what is purportedly being sold, must occur prior to any sale of the Chapter 11 Debtors’ assets.”

The JPLs will “oppose” any action that proposes to sell any of FTX’s assets without taking into consideration their concerns and their debtors interest in the liquidation proceedings in The Bahamas. But, if the Deleware court decides that it will grant FTX’s new leadership the right to sell off any assets then it will invoke Chapter 15 proceedings, which will trigger “Debtor ownership interests,” in any assets that may hold value, which may end up prolonging the Chapter 11 process and subsequently the liquidation process in The Bahamas.

The court documents also said: “Pursuant to the Bidding Procedures Motion, the Chapter 11 Debtors seek authorisation to sell equity and/or assets of the Businesses, in each case including ‘any associated contracts, rights or other property of the Chapter 11 Debtors,’ free and clear of any liens, claims, interests, and encumbrances.

“The Foreign Representatives file this Preliminary Statement and Reservation of Rights to preserve their rights with respect to any property interest in the Businesses, including, without limitation, in the Intellectual Property and Licensing Agreements, and otherwise protect their interests with respect to the sale process and potential sale proceeds.”