Attorneys for the U.S. bankruptcy trustee in Delaware and several major media outlets are challenging an effort by cryptocurrency exchange FTX to withhold names of the company’s customers and creditors from the public, the Associated Press reported. At a brief hearing Friday, the judge presiding over the FTX bankruptcy granted a motion by media outlets to intervene for the purpose of objecting to the sealing of creditor information. A separate objection by the U.S. trustee, the government watchdog that oversees chapter 11 reorganizations, also was on the agenda for Friday’s hearing but was postponed by Bankruptcy Judge John Dorsey until Jan. 11, when he likely will also hear arguments from the media. In a court filing earlier this week, an attorney for Delaware’s acting U.S. trustee noted that “disclosure is a basic premise of bankruptcy law.” “The debtors simply cannot seek bankruptcy protection and then do business behind a shield of secrecy” Juliet Sarkessian wrote. Sarkessian warned that allowing FTX to shield creditor lists and financial schedules would be a “slippery slope” and create an unfavorable precedent for bankruptcies in which creditors are also customers. Last month, Judge Dorsey temporarily granted a request by FTX to redact the names and addresses of clients and creditors from court filings, even though such information is typically public. The judge did direct FTX to file an unredacted creditor matrix under seal with the court, but the company has yet to do so.
