According to its debtors, a Swiss court has given FTX permission to investigate selling the global exchange’s distressed European arm. Meanwhile, its bankruptcy lawyers claim that the exchange could reopen as soon as 2024. FTX lawyer Andy Dietderich, partner at Sullivan & Cromwell LLP, claimed in a hearing Wednesday in Delaware that the exchange had recovered $7.3 billion in assets and can now consider a reboot.
The parent firm of the exchange, FTX, has a US arm known as FTX.US, but the $7.3 billion amount applies to the exchange as a whole. Dietderich said during the hearing on Wednesday that the exchange might reopen as soon as next year, depending on funding. Assets seized thus far have been frozen pending court approval of FTX’s creditor settlement scheme, which may take some time.
According to Dietderich during the hearing, reopening FTX’s trading doors could be part of the proposal. The court proceedings were covered in full by Reuters. According to bankruptcy court records, FTX’s legal staff has been setting the framework for the exchange’s restart. The now-shuttered exchange’s February legal expenses, published this week as part of its compensation report filings, indicate debtors paid nearly $30 million to six different law firms in a month.
In February, Sullivan & Cromwell received $13.5 million from FTX for a variety of duties, including researching “long-term options” for the exchange. The bill items and Dietderish’s comments are consistent with previous assertions from the exchange, which filed for Chapter 11 bankruptcy protection in November. In January, FTX’s new CEO, John Ray, stated that the exchange might reopen at some point.
The hearing on Wednesday comes after a Swiss court gave FTX Europe AG permission to investigate selling the exchange’s European subsidiary. According to Swiss legislation, the moratorium allows the exchange to consider alternatives for the future of the business, including a potential sale.
In the exchange’s US bankruptcy proceedings, FTX Europe AG is still listed as a debtor. When granting the moratorium, Swiss courts acknowledged that fact, implying that the corporation will be required to follow the creditor payback plan if approved.