Court-appointed liquidators have rejected the validity of FTX’s Chapter 11 bankruptcy filings in the U.S.
On Nov. 15, Brian Simms, the provisional liquidator in charge of overseeing FTX’s liquidation proceedings in the Bahamas, filed for Chapter 15 bankruptcy in a court in the Southern District of New York.
Chapter 15 bankruptcy proceedings are usually carried out when a foreign debtor files for bankruptcy in a U.S. court. Chapter 11 proceedings let a U.S. court restructure a company.
In the filing, Simms said he “did not authorize the Chapter 11 filings” reported by FTX founder Sam Bankman-Fried last week. Simms then rejected the validity of FTX’s filings in the U.S., as such an action would require the consent of FTX management.
Under the Provisional Liquidation Order, FTX’s existing directors are unable to make executive decisions and act of their own accord without written instructions from the liquidator in charge.
Bankman-Fried recently expressed regret for filing Chapter 11 proceedings in the U.S., but probably not for the reasons that Simms would like to have seen.
In a Twitter DM interview with Vox, the former FTX CEO said his “single biggest f*ckup” was filing for Chapter 11.
“If I hadn’t done that, withdrawals would be opening up in a month with customers fully whole. But instead, I filed, and the people in charge of it are trying to burn it all to the ground out of shame,” said Bankman-Fried.