Did 'FTX' Start Trend of Using the Threat of an Examiner Costs and Complications As a Source of Leverage?

There are some indications that parties may in fact be using the threat of an examiner and its associated costs and complications as a source of leverage, although the jury is still out on the full impact of the FTX decision on examiner motion practice.

9 minute read March 01, 2025 at 12:09 AM
By
William E. Curtin and Chelsea McManus
Did 'FTX' Start Trend of Using the Threat of an Examiner Costs and Complications As a Source of Leverage?

In January 2024, the U.S. Court of Appeals for the Third Circuit found in FTX Trading Ltd., 91 F.4th 148 (3d Cir. 2024) that, if certain statutory requirements are met, appointment of an examiner under section 1104(c) of the Bankruptcy Code is mandatory upon the motion of a party in interest.

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