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The court-appointed provisional liquidator overseeing the bankruptcy proceedings of FTX Digital Markets in the Bahamas, Brian Simms, has questioned the justifiability of a Chapter 11 bankruptcy filing by subsidiary FTX Trading and one hundred and thirty four other affiliates in a Delaware court on 14th November.
In the filing, Simms notes FTX Digital is not part of the Delaware Petition. He mentioned that as the provisional liquidator he is the only one authorized to take any act including, but not limited to, filing the Delaware Petition.
He further adds,
“The Provisional Liquidation Order divests FTX Digital’s directors’ of the ability to act, or exercise any functions, for or on behalf of FTX Digital unless expressly instructed to do so by me in writing.”
Simms argues that because he “did not authorize or approve, in writing or otherwise,” he rejects the “validity of any purported attempt to place FTX Affiliates in bankruptcy.”
He further mentioned,
“The entire FTX Brand was ultimately operated from a single location: The Bahamas. All core management personnel likewise were located in The Bahamas.”
It is to be noted that Chapter 11 is used by businesses to assist them reorganize their debts and repay creditors while continuing their operations.
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