Key Takeaways
- District Judge Colm Connolly approved the transfer of the FTX case to the federal appellate court in the district of Delaware.
- This follows a question as to whether FTX needs further independent review.
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Delaware District Judge Colm F. Connolly approved the transfer of the case involving FTX to the US Third Circuit Court of Appeals, leading to the appointment of an independent investigator, ACCORDING in the opinion of the memorandum.
The move gained the support of the government and bipartisan senators who called for an independent investigation into the fall of Sam Bankman-Fried’s crypto empire.
The transfer of the FTX case to the Third Circuit Court of Appeals moves the trial to the Federal Appellate Court for the districts of New Jersey, Delaware and Pennsylvania. The docket further explains that it involves a matter of public importance or question of law that requires “resolving conflicting decisions:”
“A court of appeals has the right to exercise jurisdiction over an appeal taken directly from a bankruptcy court order if the district court affirms that the order […] involves something of public importance.”
The ruling indicated that the remaining question is a legal one: Whether the bankruptcy code requires an independent review.
District Judge Connolly stated that his position is mandated by law to pass the case higher if requested by the US Trustee, a division of the Department of Justice that deals with bankruptcy issues and if there is no dispute about the truth.
Citing the February 21, 2023 order, Judge Connolly said the decision to send the case to the Third Circuit Court “‘involves a question of law over which there is no controlling decision in the’ Third Circuit or Court Supreme.”
Connolly’s ruling determined that no disputes were raised regarding the Trustee’s request for an examinee or the debtor in excess of $5 million in settled, liquidated, unsecured debts, prohibiting of debts for goods, services, or taxes, or the debts of an insider, stated in the docket. :
“Therefore, I have no choice but to grant the Trustee’s motion.”
The embattled former CEO of FTX, Bankman-Fried, is now fighting DOJ charges, including wire fraud, since FTX’s bankruptcy filing in November. Additional submissions in November from current FTX CEO John J. Ray III suggest that FTX is an example of a “complete failure of corporate controls.”
