FTX Creditors Raise Concerns Over Excessive Spending by Bankruptcy Managers
An FTX creditor, Lidia Favario, has brought attention to the extravagant spending by bankruptcy managers handling the defunct exchange’s proceedings, according to a recent court filing.
Questionable Expenses
- Favario highlighted specific instances of extravagant spending by law firms like Sullivan & Cromwell and Alvarez & Marsal (A&M).
- Professionals from these firms were found staying at high-end accommodations such as the five-star Hotel Du Pont in Delaware.
- One A&M professional spent $971.74 for a single night at a luxury hotel in New York, while others stayed at the Grand Hyatt in Nassau.
- Transportation costs also drew scrutiny, with one professional racking up $1,733 on taxi rides in a single week and another billing $151.33 for a five-minute taxi ride.
- The estate reportedly paid $2,683 for three taxis to wait for FTX CEO John Ray during his deposition, with business-class flights costing up to $4,279 per trip.
Favario expressed concern that these excessive expenses are not in line with the DOJ guidelines on reasonable spending and urged the court to broaden the scope of expense reviews for accountability.
Scam Emails Targeting FTX Creditors
Another creditor, Sunil Kavuri, raised awareness about a surge in scam emails targeting FTX creditors, aiming to exploit confusion surrounding the repayment timeline.
“Scam emails are being circulated. Do not click on any links. FTX has not initiated repayments. Only use the official claims portal for updates.” – Sunil Kavuri
These fraudulent emails seem to stem from misinformation spread by certain crypto influencers, falsely claiming that FTX repayments would commence in January 2025, despite official statements confirming payouts are not expected until March 2025.
