- The dismissal of Sullivan & Cromwell from the FTX lawsuit marks a significant moment for the beleaguered cryptocurrency exchange’s creditors.
- Investors initially aimed to hold the law firm accountable for its alleged involvement in FTX’s multi-billion-dollar fraud scheme.
- Adam Moskowitz emphasized that the decision to dismiss was made after a thorough review of the evidence, promoting collaboration to maximize recovery for victims.
The recent dismissal of Sullivan & Cromwell from the FTX class-action lawsuit indicates a shift in focus for the creditors as they seek restitution from other liable parties.
FTX Investors Shift Strategy Following Dismissal
In a noteworthy legal development, the Moskowitz Law Firm has voluntarily dropped Sullivan & Cromwell from the ongoing class-action lawsuit connected to FTX. Initially filed on February 16, the lawsuit accused the U.S. law firm of facilitating FTX’s substantial fraudulent activities and seeking compensation for civil conspiracy and breaches of fiduciary duty.
Sullivan & Cromwell’s Role and Subsequent Dismissal
Sullivan & Cromwell, which acted as an external legal advisor during various corporate transactions for FTX, has been at the center of scrutiny as creditors navigate the aftermath of the exchange’s collapse. However, following a careful review of the facts, lead plaintiffs’ counsel Adam Moskowitz stated, “We don’t think, based on the evidence, that we’ve seen that there’s enough here to state a cause of action, so we dismissed it.” This decision opens new avenues for focusing on other responsible parties.
Judge Approves FTX Bankruptcy Reorganization Plan
Interestingly, the dismissal aligns with a recent ruling by U.S. Bankruptcy Judge John Dorsey, who has approved FTX’s reorganization plan aimed at repaying creditors. The approved strategy is set to allow claimants to recuperate approximately 119% of their claimed account value, an unprecedented development in bankruptcy cases related to cryptocurrency.
Future Implications for FTX Creditors
This dismissal is poised to be a strategic advantage for FTX’s creditors, who have suffered substantial financial losses. Moskowitz expressed optimism, noting the dismissal could streamline efforts in regrouping their claims against the remaining parties involved in the FTX debacle. His statement underscores a collective push toward securing maximum recovery for the victims involved. “This is a great day for all FTX victims because working together with the Estate, we will try our best to provide every victim with 100% of their full damages from these 43 responsible parties,” he remarked.
Conclusion
The recent developments surrounding the FTX class-action lawsuit against Sullivan & Cromwell may serve as a pivotal moment for investors seeking restitution. The move indicates a focused effort to consolidate resources against the central figures responsible for the fraud, potentially leading to a more efficient recovery process. As the legal landscape continues to evolve, stakeholders will watch closely to ensure that justice is served for the substantial losses inflicted upon FTX creditors.
