Enron’s Liquidator to Oversee FTX’s Massive Crypto Bankruptcy

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(Bloomberg) — When Sam Bankman-Fried’s empire collapsed into bankruptcy on Friday, the onetime crypto wunderkind handed the reins to the man who oversaw the unwinding of Enron Corp.

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John J. Ray III is now the Chief Executive Officer of FTX Trading Ltd. and a host of related entities, court papers show. Ray, a restructuring expert, oversaw the liquidation of Enron Corp. and weighty settlements that followed its accounting scandal.

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At Enron, Ray captained the return of more than $20 billion to creditors in the years following the energy company’s bankruptcy, according to a statement in 2008. Creditor recoveries surpassed 50 cents on the dollar at the time, beating initial estimates. 

At FTX, Ray will have no shortage of work to do. A web of more than 100 FTX-related entities began entering bankruptcy in Delaware on Friday, and the Bahamas Securities Commission moved to freeze the assets of one unit on Thursday. Regulators in the US are looking into the company’s downfall.

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Former Treasury Secretary Lawrence Summers compared the FTX debacle to Enron’s downfall in an interview with Bloomberg Television. 

“The smartest guys in the room. Not just financial error but — certainly from the reports — whiffs of fraud,” Summers said. “Stadium namings very early in a company’s history. Vast explosion of wealth that nobody quite understands where it comes from.”

FTX Trading Ltd. listed assets and liabilities of at least $10 billion each in its Chapter 11 bankruptcy petition, making it the biggest filing of the year. 

“Ultimately I’m optimistic that Mr. Ray and others can help provide whatever is best,” Bankman-Fried tweeted on Friday.