‘Impossible situation’ fear on FTX Bahamas wind-up

negotiating with the US Justice Department for the return of $143m in cash that the latter seized in late 2022 from US bank accounts in FTX Digital Markets’ name, but these efforts which - if successful - would give the Bahamian proceedings a funding source with which to pursue assets and claims have yet to bear fruit.

The consequences were exposed during yesterday’s Delaware proceedings, during which it was revealed that the Bahamian provisional liquidators have “less than $1m” in cash left and are down to a “few hundred thousand dollars”. Asked about the fall-out if litigation with Mr Ray and the Chapter 11 debtors proved “never ending”, Mr Greaves replied: “We have already committed to expenditure beyond the funds we have, so we would be in an impossible situation.”

These financial obstacles, while difficult, are not insurmountable. FTX Bahamas’ liquidators could seek the Supreme Court’s permission to raise or borrow funds from sources such as litigation financiers, while it has become an established principle that clients contribute to winding-up costs incurred on their behalf via a portion of their assets being held in a trust or fiduciary capacity.

The Bahamian provisional liquidators are asking the Delaware court to confirm that the “directions” they are seeking from Sir Ian Winder, the chief justice, over FTX Digital Markets’ winding-up do not violate the automatic worldwide stay or freeze imposed by the Chapter 11 proceedings. Or, alternatively, if they do that the “stay” be lifted to enable them to progress the Bahamian liquidation, but Mr Ray and his team are opposing this at every turn.

Judge John Dorsey, after hearing arguments from both sides, urged them to go away and talk last night to see if the dispute can be resolved by negotiation. However, in disclosing that he will give his ruling on the matter this morning, he warned that he will not cede his jurisdiction or that of the Delaware Bankruptcy Court to the Bahamian Supreme Court especially given that the vast majority of FTX-related assets are under his control.

Speaking after evidence was given by both sides’ witnesses, Judge Dorsey said: “Here’s my thinking at this point. From a practical standpoint, if I allow the joint provisional liquidators to go to The Bahamas and proceed there, what could possibly happen? Regardless of what The Bahamas court does, I have to make the same determination and do it on my own, and the assets we are talking about are all in the interim jurisdiction of this court.

“Regardless of what the Bahamian court decides, and it could decide all the assets go to FTX Digital Markets, they cannot go to FTX Digital Markets unless I so decide. What do we gain by allowing this to go forward between two different courts?”

Mr Shore, on the Bahamian joint provisional liquidators’ behalf, argued that the “directions” hearing that his clients wish to pursue before Sir Ian “tees it up” in terms of securing either a consensual or court-to-court co-operation between Chapter 11/ Delaware and this nation moving forward.

Noting that his clients and Mr Ray’s team “can’t seem to get out of their own way”, he warned that the alternative is “a jurisdictional war” between the two sides that threatens to suck time and money away from efforts to maximise asset/cash recoveries for FTX creditors and investors in both The Bahamas and the Chapter 11 proceedings.

“At the end of the day, if we’re going to disagree that will lead to a jurisdictional squabble which is the thing we should work hard to avoid,” Mr Shore argued. To which Judge Dorsey retorted: “That’s what I’m trying to avoid as well.” Indicating he had not been much moved by the Bahamian provisional liquidators’ arguments, the judge reiterated his previously expressed position at the hearing’s end.

“I will tell you now that under no circumstances would I defer on a jurisdictional issue to a foreign court,” Judge Dorsey said, “and the jurisdictional issues here are whose assets are they? I have in rem jurisdiction, and it has to be decided here..... As a practical matter, they [the provisional liquidators and Supreme Court] don’t have access to the assets. Only I have access to the assets. I’m going to ask the parties to talk this evening and see if there is any way to resolve this issue.”

Mr Shore, meanwhile, argued that Mr Ray and his team are using their opposition to waiving the Chapter 11 stay as a means to halt FTX Digital Markets’ winding-up and deprive it of assets. “The debtors can use the stay to strangle the joint provisional liquidators’ case,” he argued. “If it’s enforced, they’re not going to be able to fight.....”

He suggested that the FTX US chief was aiming to place the Bahamian trio in a “trap”, and use the Delaware court to trigger that. “What I don’t want is what they’re actually doing; starve my estate, which they will do through you, with the stay and do what they’re not able to do through the normal process, which is wish it [the Bahamian provisional liquidation] away,”

Mr Shore argued.

Andrew G. Dietderich, an attorney with Sullivan & Cromwell, appearing for Mr Ray, asserted that what the Bahamian liquidators are really seeking to do is “gut” the Chapter 11 proceedings by having central jurisdiction over FTX’s winding-up transferred to the Supreme Court.

“This may be one of the most complex insolvencies ever filed,” he argued. “It may be the most complex insolvency ever. We have one saving grace. We know who is calling the balls and strikes. If you take central jurisdiction away from us, we may not be here for years; we may be here for decades.”

The Bahamian provisional liquidators believe it

Lawyers Blame Chatgpt For Tricking Them Into Citing Bogus Case Law

By LARRY NEUMEISTER

Associated Press

TWO apologetic lawyers responding to an angry judge in Manhattan federal court blamed ChatGPT Thursday for tricking them into including fictitious legal research in a court filing.

Attorneys Steven A. Schwartz and Peter LoDuca are facing possible punishment over a filing in a lawsuit against an airline that included references to past court cases that Schwartz thought were real, but were actually invented by the artificial intelligence-powered chatbot.

Schwartz explained that he used the groundbreaking program as he hunted for legal precedents supporting a client’s case against the Colombian airline Avianca for an injury incurred on a 2019 flight.

The chatbot, which has fascinated the world with its production of essay-like answers to prompts from users, suggested several cases involving aviation mishaps that Schwartz hadn’t been able to find through usual methods used at his law firm.

The problem was, several of those cases weren’t real or involved airlines that didn’t exist.

Schwartz told U.S. District Judge P. Kevin Castel he was “operating under a misconception ... that this website was obtaining these cases from some source I did not have access to.”

He said he “failed miserably” at doing follow-up research to ensure the citations were correct.

“I did not comprehend that ChatGPT could fabricate cases,” Schwartz said.

Public Notice

INTENT TO CHANGE NAME BY DEED POLL

The Public is hereby advised that I, TAMARA NICOLE BAIN STUART of P.O. Box N1170 Marathon Estate, New Providence, Bahamas, Parents of DAVID JOSHUA STUART A minor intend to change my child’s name to DAVID JOSHUA HANNA If there are any objections to this change of name by Deed Poll, you may write such objections to the Deputy Chief Passport Officer, P.O. Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.

Microsoft has invested some $1 billion in OpenAI, the company behind ChatGPT.

Its success, demonstrating how artificial intelligence could change the way humans work and learn, has generated fears from some. Hundreds of industry leaders signed a letter in May that warns “ mitigating

Public Notice

INTENT TO CHANGE NAME BY DEED POLL the risk of extinction from AI should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.” is “crucially important” to the progress of FTX Digital Markets’ winding-up that Sir Ian be able to give “directions” on several “core fundamental issues”. However, their application to the Delaware court is driven by the need to ensure this does not violate the freezing order imposed by the Chapter 11 bankruptcy protection, as any breach could result in sanctions and penalties being imposed on FTX Digital Markets’ US-based assets

The Public is hereby advised that I, TAMARA NICOLE BAIN STUART P.O. Box N1170 Marathon Estate, New Providence, The Bahamas, intend to change my name to TAMARA NICOLE HANNA If there are any objections to this change of name by Deed Poll, you may write such objections to the Chief Passport Officer, P.O.Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.

Among the key issues that Sir Ian will be asked to determine is which “terms of service”, the document that governed the relationship between FTX’s international platform and its customers, applies and on what date - as this is critical to working out when, and if, clients were migrated to FTX Digital Markets and became its customers prior to the crypto exchange’s early 2022 implosion.

Another vital issue that Sir Ian will be asked to decide is whether FTX Digital Markets was holding assets, either digital, fiat or both, on trust for investors/clients in a fiduciary or escrow capacity. If it was, then assets treated in such a manner will belong to the client, but if they were not then such properties belong to the liquidation estate.

Judge Castel seemed both baffled and disturbed at the unusual occurrence and disappointed the lawyers did not act quickly to correct the bogus legal citations when they were first alerted to the problem by Avianca’s lawyers and the court.

Public Notice

INTENT TO CHANGE NAME BY DEED POLL

The Public is hereby advised that I, SEAN FAWKES/ EDITH BASTIAN of Yellow Elder, New Providence, Bahamas, Parents of KAMIAH HADASSAH MUSGROVE A minor intend to change my child’s name to KAMIAH HADASSAH FAWKES If there are any objections to this change of name by Deed Poll, you may write such objections to the Deputy Chief Passport Officer, P.O. Box N-742, Nassau, Bahamas no later than thirty (30) days after the date of publication of this notice.

Senior Credit Solutions Manager

The Senior Credit Solutions Manager oversees the Wealth Credit Solutions team in the Bahamas, ensuring business strategies, plans and initiatives are executed The post holder contributes to the profitable growth and quality of the Wealth Credit business by performing financial solutions-related activities including risk analysis, deal structuring, negotiations, and pricing

The post holder has responsibility for the ongoing quality of the assigned credit portfolio through control and administration of terms and conditions as specified in individual authorizations and portfolio metrics and KPIs

The post holder also works closely with Senior Relationship Management team leads and Credit Risk Management and will interface directly with clients from time to time

MAJOR ACCOUNTABILITIES:

 Contributes to the profitable development of Wealth Credit business by ensuring timely analysis, structure and presentation of credit / financial solutions proposals and reviews within assigned portfolio.

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 Ensures the ongoing quality of the assigned credit portfolio through control and administration of the specific conditions and reporting requirements as specified in individual authorization are adhered to by adhering to all regulatory and internal bank policies and requirements.

 Conducts timely and effective performance assessment and making sound recommendations for career development ensuring that employee development is a priority for all employees on the team.

 Safeguards the Bank’s assets and liabilities by maintaining adherence to the Guidelines for Business Conduct, by reporting any unusual occurrences or fraudulent activities as per established procedures.

EDUCATIONAL/COMPENTENCY REQUIREMENTS

 Strong coaching and leadership skills including previous people management experience

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Qualified candidates should submit C.V via email to: hrbahamas@scotiawealth.com on or before June 12th, 2023

Please note that only those individuals short - listed for an interview will be contacted.

Please send your resume no later than June 12th, 2023 to: hrbahamas@scotiawealth.com

Kindly put the job title in the subject line when applying.