WILMINGTON, Delaware – Three letters standing for monstrous fraud remain on the FTX Arena of the Miami Heat basketball team.
Arena owner Miami-Dade County can’t sue to cancel its naming agreement because bankruptcy petitions of FTX entities automatically stayed all litigation.
Miami-Dade moved for relief from the stay but Bankruptcy Judge John Dorsey hadn’t ruled as of Dec. 19.
Eric Sutty in the Wilmington office of Armstrong Teasdale in St. Louis filed the relief motion on Nov. 22.
He claimed significant hardship to the county would result from maintenance of the stay because it would force the county to be associated with FTX.
Sutty claimed maintenance of the stay would impede the county’s efforts to obtain a new naming rights partner.
He alleged that FTX entities breached their obligation to comply with laws governing their financial exchange platforms.
“These breaches appear to have been repeated, recurring and incurable,” Sutty wrote.
“Immediate termination enables both the debtors and the county to mitigate their damages,” he added.
He claimed Miami-Dade entered into the agreement in April 2021 in return for $135 million over 19 years.
FTX allegedly tendered two payments totaling $19.5 million.
Sutty claimed a $5.5 million payment is due Jan. 1.
He claimed Miami-Dade used the revenues to combat gun violence and provide opportunities for prosperity.
He wrote that in addition to FTX’s failure to comply with laws, failure to make a payment would constitute default and trigger termination.
In that event, he claimed FTX would owe fees for three years after termination.
Sutty claimed the harm to Miami-Dade in relief from the stay would outweigh any hardship on FTX.
He wrote that objections were due on Dec. 9, and no one objected.
The bankruptcy proceedings deserve a “crypto” prefix as much as the currency that FTX owner Sam Bankman-Fried sold.
The prefix means secret or hidden.
The noun crypt means an underground vault.
The adjective cryptic means hidden, ambiguous, mysterious, baffling.
In that spirit, FTX offered no reliable records and sealed its creditor list and a motion to exculpate and indemnify certain individuals.
It accused Bahama of protecting Bankman-Fried to the detriment of the U. S., and Bahama officials accused the U. S. of protecting him from them.
A full report will follow.