Bankrupt Terraform gets OK to hire law firm Dentons, with return of $48 mln from retainer | Reuters

Terraform Labs received a U.S. bankruptcy judge’s permission on Tuesday to hire Dentons to defend the company from a U.S. Securities & Exchange Commission lawsuit, after the law firm agreed to return $48 million that Terraform had pre-paid for legal work.

U.S. Bankruptcy Judge Brendan Shannon approved the Dentons hire at a hearing in Wilmington, Delaware, bankruptcy court, finding that Terraform’s legal spending was a “necessary appropriate” use of the blockchain and software company’s limited resources.

Dentons’ large retainer had sparked objections from Terraform’s creditors, the SEC, and the Office of the U.S. Trustee, which is the U.S. Justice Department’s bankruptcy watchdog.

Those objectors argued that Terraform had funneled a large portion of its available cash out of the reach of its creditors and outside of bankruptcy court oversight, by sending Dentons a total of $166 million since the start of 2023. They also said that Dentons still held more than $70 million in advance legal fees.

Source: Bankrupt Terraform gets OK to hire law firm Dentons, with return of $48 mln from retainer | Reuters