Former FTX chief regulatory officer Daniel Friedberg has joined creditors’ objection accusing the US general counsel of delegating business to the firm handling FTX bankruptcy counsel at the moment, Sullivan & Cromwell LLC.
Daniel Friedberg supports the creditors’ motion
Former FTX chief regulatory officer Daniel Friedberg has joined creditors’ objection accusing the US general counsel of delegating business to the firm handling FTX bankruptcy counsel at the moment, Sullivan & Cromwell LLC. Friedberg made the allegations on the Jan. 19 bankruptcy filing with the United States Bankruptcy Court for the District of Delaware. He resigned from his FTX office duties on Nov. 8.
“I submit this declaration in support of Mr. Warren Winter’s Amended Objection to Debtors’ Application for an Order authorizing the retention and employment of Sullivan & Crowell LLC as counsel to the debtors” . Friedberg wrote in the filing.
Daniel also wrote in the court papers that Ryne Miller, a former partner of Sullivan & Crowell, channeled business to the company across various cases with a personal agenda to return to the law firm as a partner after “his stint at the debtors”.
According to Friedberg’s court declaration, Miller asked if he could hire his previous law firm after his employment in the twilight months of 2020. Friedberg responded to this query stating that Miller should restrict his selection process only to professional service providers for the outside counsel task. Moving forward, Miller delegated the task to S&C as the primary counsel for FTX US, FTX Derivatives, and SBF’s holding firm Emergent.
Friedberg’s declaration is more than a support to creditors
According to MetaLawMan’s Twitter thread, the declaration filed by Friedberg shockingly reveals serious credibility issues in the FTX exchange. First, the statement suggests that former S&C partner Ryne Miller was unethically directing business projects to his former law firm. This includes the ongoing bankruptcy case.
Secondly, FTX US was solvent enough not to file for bankruptcy. Thirdly, FTX has claims for malpractice against the subject law firm worth millions of dollars. Moreover, Friedberg states that an S&C partner’s sworn declaration has false statements. Finally, S&C was the primary outside counsel for FTX US, FTX Derivatives, and Emergent.
It is still being determined if what Mr. Friedberg declared in the filing is true. However, a heated debate will likely ensue once he shows up in court as S&C tried to clarify their name and refute his allegations.