NASSAU, BAHAMAS — The joint provisional liquidators for FTX’s Bahamian subsidiary, FTX Digital Markets, have filed an emergency motion in a Delaware bankruptcy court in a bid to gain access to company records.
In court documents filed last Friday, the liquidators said that they urgently require access to certain electronic records related to FTX Digital’s property and financial affairs so they can “identify the company’s assets, investigate potential claims and maintain value available to FTX Digital’s creditors.”
FTX Digital Markets was placed into provisional liquidation by the Supreme Court of The Bahamas on November 10.
The Supreme Court appointed Brian Simms KC, of Lennox Paton, Kevin Cambridge, of PwC Bahamas, and Peter Greaves, of PwC Hong Kong, as the Joint Provisional Liquidators. FTX Trading Ltd filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware on November 11.
The liquidators in court filings on Friday claimed that access to this information was “abruptly” cut off on or about November 12, 2022, and the US debtors – FTX Trading and its 134 affiliates – have the ability to restore it.
“Despite some encouraging statements from US debtors’ counsel, no progress has been made in restoring that access, frustrating the ability of the joint provisional liquidators to perform their duties mandated under Bahamian law,” the filing read.
“Since the first-day hearing, the joint provisional liquidators have engaged with the US Debtors in an attempt to find a mutually agreeable solution, but so far, no access to the systems or other information has been shared.”
According to the liquidators, there are at least five categories of information that they need urgent access to in order to perform their duties; namely international trading platform data, email records for FTX Digital employees, slack chat records for FTX Digital employees, documents stored on Google Drive and Quick Books Accounting system.
The liquidators are seeking a court order which will require the US debtors to provide access to the necessary information as they claim that doing will not adversely harm the US debtors.
They have warned however that without access to the information they will be unable to perform their court-mandated duties.
“Moreover, unless the Joint Provisional Liquidators are able to secure access to the recorded information, there is a risk that critical information will be automatically deleted and forever lost,” the liquidators stated.
