Judge Dorsey begins by condemning the letter sent by four US Senators about Sullivan & Cromwell's role in the FTX bankruptcy as an "inappropriate ex parte communication".

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More on the letter: https://www.ft.com/content/f760ae83-9802-4f12-a90b-c37773b1616c

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FTX attorney says that the line of credit extended to Alameda Research via the FTX backdoor was effectively $65 billion.

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One item on the agenda today is the request by FTX to redact all creditor names and information. FTX wants to enter a declaration by attorney Kevin M. Cofsky, media companies' lawyers and US Trustee object to him as an expert.

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Media companies in this case are Bloomberg, Dow Jones & Company, New York Times, and The Financial Times, who are objecting to the redaction of creditor names.

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Kevin M. Cofsky is going to testify, and they'll handle objections to his opinion and/or expertise as they go. He's the debtors' proposed investment banker, and wants to speak to the value of the creditor list as an asset to FTX that could be devalued by disclosure.

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The customer list includes names and personal information of ~9.5 million FTX customers. Media companies have objected specifically to redaction of the names, but do not object to sealing addresses and contact information.

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The US Trustee does not object to filing under seal the addresses of creditors who are individuals. However, they believe all names and the addresses of non-individual creditors should be disclosed.

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FTX has recently proposed kicking the can down the road by asking the judge to authorize redaction for a period of six months.

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FTX and Cofsky are expressing concerns that publishing names but redacting addresses and other information would not be sufficient to protect the value of the customer lists, due to the uniqueness of some names on the list that could be identified via online searches etc.

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FTX lawyers arguing that the court should ignore precedent set in the Celsius bankruptcy to disclose debtors as an "outlier", and instead use precedent set in the Cred, Inc. bankruptcy case in the same district.

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The argument today is that if they narrow the decision to only whether to seal the customer data for six months, they can focus solely on discussion of potential value of the data as an asset and not also go into the question of protecting customer privacy.

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Unsurprisingly the debtors are reserving the right to request extensions, and to argue that the data should remain sealed in perpetuity.

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Judge Dorsey says that the case does present "extraordinary circumstances" based on the length of the list of names and the difficulty in distinguishing between creditors and customers.

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Dorsey has overruled the objections and allowed the list of names to remain sealed for three months (not the requested six), in hopes that there will be more clarity on creditors vs. customers by that point.

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Dorsey also wishes to hear arguments pertaining to risk to individuals if the names were disclosed, and is concerned about protecting individuals from harm.

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He wants to hear more about the question of distinguishing creditors vs. customers at the next hearing (Jan 20), with the intention of disclosing people who are only creditors, not customers.

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Further hearings on §107(b) and (c) will be held in three months, at which point they will also address questions on foreign law including GDPR and two Japanese laws (APPI and FIEA).

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