(AP) — A federal appeals court has ordered the appointment of an independent examiner in the bankruptcy case of FTX amid concerns about widespread fraud preceding the collapse of the multibillion-dollar cryptocurrency exchange.
A three-judge panel in Philadelphia issued the ruling Friday in an appeal filed by the U.S. bankruptcy trustee, who serves as a government watchdog in Chapter 11 reorganizations.
U.S. Bankruptcy Judge John Dorsey denied the trustee’s request last February.
The appeals court reversed Dorsey’s ruling, agreeing with the trustee that the bankruptcy code mandates the appointment of an examiner.
“Such is the case here.”Restrepo also noted that an examiner is required to make his or her findings public, whereas a debtor or creditors committee conducting an internal investigation has no such obligation.
Persons:
John Dorsey, Dorsey, John Ray III, FTX, Sam Bankman, Fried, Prosecutors, ”, Luis Felipe Restrepo, ” Restrepo
Organizations:
—, U.S, FTX, Alameda Research
Locations:
Del, Philadelphia, FTX