FTX's bankruptcy law firm Sullivan and Cromwell LLP is coming under a microscope amid allegations of potential conflicts of interest and bad ethics.
"This Article has shown that, in relinquishing control of his companies at the behest of lawyers who appear to have been motivated by their own concerns, he was also 'FTX’d up,''' the professors said in the paper. "While we do not challenge the jury’s verdict or the company’s need to use chapter 11, we worry about BigLaw attorneys who marshal and manipulate arguments about the 'public interest' in order to advance or protect their own interests.
The bankruptcy itself has endured disagreements over S&C's role. FTX creditors filed a class action against S&C last month and alleged that the firm gained knowledge of the exchange's workings and ultimately supported it in its fraudulent behavior. Bankman-Fried has also said that the law firm pressured the exchange into bankruptcy and strong-armed him into naming John Ray lll as CEO.
The professors said it's possible that if S&C had waited a few more days to file Chapter 11, Bankman-Fried could have secured new funding. “In an effort to support Mr.