FTX creditors have gone to court to request that their Turkish subsidiaries be removed from Chapter 11 bankruptcy proceedings. Lawyers claim that doing so is in the best interests of the debtors and their stakeholders.

FTX Attorneys Plead to Have Turkish Firms Excluded from Bankruptcy Proceedings

According to a recent court filing, creditors of FTX have filed a motion to remove the company’s assets in response to the Chapter 11 bankruptcy proceedings. Items related to FTX listed in the court filing include FTX Turkey and SNG Investments. FTX claims that the SNG and crypto exchange were locally operated and was a wholly owned subsidiary of Alameda Research as a market maker.

Lawyers claim that after the collapse of FTX, they can provide guidance. They state that Turkish authorities have frozen and confiscated all assets of Turkish debtors. FTX’s legal experts insist that these two entities should be excluded from the bankruptcy proceedings. They believe it is in the best interests of the debtors and their stakeholders.

“The debtors do not expect the Turkish authorities or any trustee in Türkiye to seek recognition of their actions in the United States, and the debtors would attempt to challenge such recognition if reciprocity is not established,” reads the filing page.

This follows FTX lawyers asking for court permission to subpoena FTX founder Sam Bankman-Fried (SBF) and his inner circle. SBF has not responded to or complied with requests, even though publicly stating that he wants to “explain what happened” and “try to help customers.” In their most recent filing, the debtors insist that the dismissal of Turkish debtors’ Chapter 11 circumstances “is warranted.”

For this reason, Turkish authorities have placed a freeze on the debtors’ assets, and they believe that Chapter 7 conversion “would not serve the best interests” of the debtors, creditors and stakeholders. The filing also explains that funds were seized by the Turkish Financial Crimes Investigation Board (MASAK), which was investigating FTX’s business transactions. The lawyers agree that the bankruptcy court would have no “legal or practical effect” in Turkey.