Debtors are being attacked on Twitter because of Sam Bankman-Fried

One of the attorneys defending debtors in FTX’s bankruptcy case, James Bromley, has denounced social media behavior directed against his law firm and spread by former CEO Sam Bankman Fried.

In a hearing on Jan. 20 in the District of Delaware, attorneys discussed motions addressing apparent conflicts of interest between the cryptocurrency exchange and Sullivan & Cromwell, the law firm in charge of looking into FTX’s bankruptcy. The idea that the law firm would be unable to operate as an unbiased examiner given that it had previously supplied legal services to FTX and one of its former partners, Ryne Miller, later went on to become the FTX US senior counsel, was rebutted by Bromley, a partner at Sullivan & Cromwell.

On January 19, Daniel Friedberg, the former chief regulatory officer of FTX, submitted a declaration to the court suggesting that Miller sought to encourage business for Sullivan & Cromwell because he said he planned to join the firm as a partner after the bankruptcy process. Bromley stated in court that the debtors would suffer “further attacks on Twitter” and similar filings, probably leading to delays, if the judge were to grant an adjournment based on these claims.

Friedberg agreed to participate in the virtual bankruptcy procedures, but was unable to speak because he did not physically attend the hearing. The judge determined that there were no actual or potential conflicts of interest that would have prevented Sullivan & Cromwell from continuing to represent the debtors.

“One of the things that the debtors have been facing generally in these cases is assault by Twitter,” said Bromley. “It is very difficult, your honor, to cross examine a tweet, particularly tweets that are being issued by individuals who are under criminal indictment and whose travel is restricted.”

Following “two extremely long and rambling tweets” from SBF, Bromley later claimed Friedberg and Bankman-Fried had been using social media to “hurl stones” at creditors for submitting information to police. Additionally, he mentioned that Bankman-Fried was “immediately online” to respond to an article in which CEO John Ray questioned FTX’s solvency and disputed data aimed at promoting openness for debtors.

“Mr. Bankman-Fried is behind all of this, and whenever we were to move this, wherever we moved it to, there is in my mind an absolute certainty that he’s going to try to do something to get in the way. He’s lashing out.”

Bankman-Fried retweeted rumors that Sullivan & Cromwell will continue to represent FTX debtors even though she had not yet responded to the decision.

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