Bankruptcy and restructuring Chair Eric Monzo recently spoke to The New York Times to provide some important background on claw-back litigation in the FTX bankruptcy proceedings.
The article "What Happens to FTX Clawback Cases if the Company Repays its Creditors" addresses the potential fallout from lawyers for the failed crypto exchange informing the bankruptcy judge that creditors will be paid in full despite presenting a guarantee or strategy.
"Some of the clawback cases involve allegations of fraud, but not all do. Before fraud claims are argued, there is typically a legal fight over whether a company was insolvent at the time of the investment or that the investment led to insolvency. If every FTX creditor stands to get 100 cents on the dollar, the clawback cases that don’t involve fraud wouldn’t serve much of a financial purpose and may be more difficult to argue, some lawyers say. 'In theory, clawbacks may go away there,' said Eric Monzo."
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