FTX customers going outside bankruptcy court to recover losses from Sam Bankman-Fried’s failed crypto empire are using a legal path that has worked in past collapses such as WorldCom and Enron: They’re going after the supposed enablers.
Laws that freeze claims against debtors in bankruptcy don’t apply to third parties. So customers have filed more than a half-dozen proposed class actions against the NFL’s Tom Brady, accounting firm Prager Metis and Bankman-Fried as an individual, among others.
“When you have a massive financial collapse like FTX, there are going to be many, many institutions—and perhaps individuals—who allegedly profited improperly along the way,” said Samuel Issacharoff, a New York University law professor.
Source: FTX Customers Take Enron, WorldCom Path in Legal Fight for Cash
