Law firm Sullivan & Cromwell can represent FTX debtors, judge rules

White shoe law firm Sullivan & Cromwell can represent FTX debtors in the trouble exchange’s bankruptcy case, a Delaware bankruptcy court judge ruled.

“There’s no evidence of any actual conflict here,” Judge John Dorsey said, overruling a pair of FTX customers who objected to the law firm's role in the case over its previous work with the exchange.  

Court documents show FTX paid Sullivan & Cromwell $8.5 million for its work on 20 individual matters. FTX General Counsel Ryne Miller was previously a partner at Sullivan & Cromwell, and FTX lawyer Tim Wilson was also an associate at the law firm. 

Sullivan & Cromwell has said it will not investigate matters pertaining to itself or its former associates, and will instead allow another law firm to handle those issues.

Dan Friedberg, the former FTX compliance chief who was wrapped up in the Ultimate Bet poker scandal in 2008, filed a last-minute declaration against Sullivan & Cromwell on Thursday afternoon. Dorsey said Friedberg’s declaration was “full of hearsay, innuendo, speculation” and “rumors,” and would not allow Friedberg to testify via Zoom because he did not appear in person in Delaware.

FTX, once valued at $32 billion, collapsed after a run on its utility token. Founder Sam Bankman-Fried is facing criminal fraud charges in a separate case.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.