S&C Lawsuit Dismissed: How Will It Impact FTX Creditors?

• FTX investors voluntarily dismissed the lawsuit against Sullivan & Cromwell (S&C).
• Moskowitz Law Firm believes the dismissal is a positive development for FTX creditors.
• The firm cites insufficient evidence as the primary reason for dropping the lawsuit.

FTX investors voluntarily dismissed the lawsuit against the law firm Sullivan & Cromwell (S&C) following the approval of the FTX reimbursement plan. The Moskowitz Law Firm, a major plaintiff counsel, stated that the dismissal is a positive development for the FTX creditors and would help move the case forward.

A group of FTX investors filed a lawsuit against the US law firm on February 16, alleging that S&C played a significant role in FTX’s massive customer fraud. The lawsuit further accused the law firm of gaining financial benefits from the FTX fraud. The investors sued the company for compensation for damages for civil conspiracy and aiding FTX in the fraud.

FTX investors dropped their class-action lawsuit against S&C in a Miami federal court, effectively dismissing all claims against the law firm. They acknowledged that there are no pending or active claims against S&C at the present time.

Moskowitz Law Firm stated that the investors have “voluntarily” excluded S&C as a defendant in the lawsuit. The firm cited insufficient evidence as the primary reason for dropping the lawsuit. Adam Moskowitz, the founding and managing partner of the Moskowitz Law Firm, further added,

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.

The investors’ decision to dismiss the S&C lawsuit comes following the court’s approval of FTX’s customer repayment plan. In a recent development, the U.S. bankruptcy court greenlit FTX’s reimbursement plan, allowing the company to repay its customers fully. As per the plan, 98% of the creditors are expected to recover around 119% of their crypto claims.