FTX investors have voluntarily dismissed their proposed class-action lawsuit against United States law firm Sullivan & Cromwell (S&C).
On Feb. 16, a group of FTX creditors sued the law firm, alleging that it played a role in FTX’s multibillion-dollar fraud and that the company benefitted financially from it. The suit wanted compensation for damages for civil conspiracy, aiding and abetting fiduciary breaches and aiding and abetting fraud.
S&C served as an outside counsel to FTX in several deals and oversees the FTX bankruptcy proceedings.
Plaintiffs voluntarily dismiss Sullivan & Cromwell from lawsuit. Source: The Moskowitz Law Firm
Not enough evidence to build a case
In a statement sent to Cointelegraph, the lead plaintiffs’ counsel, the Moskowitz Law Firm, said it had voluntarily dismissed S&C as a defendant in the lawsuit.
Adam Moskowitz, the founding and managing partner of the firm, hopes that the dismissal will help move the case forward. The lawyer explained that there was not enough evidence to build a case. He said:
“We don’t think, based on the evidence, that we’ve seen that there’s enough here to state a cause of action, so we dismissed it. So now, as a consequence, we can sit down and work together and try to get the most recovery for the victims against the other third parties.”
Moskowitz added that this is a good development for FTX creditors, as they will focus on obtaining compensation from the perpetrators.
“This is a great day for all FTX victims because working together with the Estate, we will try our best to provide every victim with 100% of their full damages from these 43 responsible parties,” Moskowitz added.
The law firm also mentioned that there was no settlement associated with the dismissal.
Related: Ex-FTX exec ‘not worried’ about reporting to prison on Oct. 11
Judge approves FTX reorganization plan
The lawsuit’s dismissal comes after a bankruptcy judge approved FTX’s reorganization plan.
On Oct. 7, US Bankruptcy Judge John Dorsey approved a plan for FTX to wind down operations as part of their efforts to repay creditors. The plan allows the debtors to repay roughly 119% of their claimed account value.
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