Below is our initial take on recent bankruptcy-related developments:

Crypto Bank Silvergate Slides Further After Letter from U.S. Sen. Warren | CoinDesk

Following FTX’s bankruptcy, allegations were made that former CEO Sam Bankman-Fried made large transfers of customer funds to FTX’s sister firm Alameda Research. This week, three U.S. Senators, including Elizabeth Warren of Massachusetts, penned a letter asking Silvergate, a bank that has been friendly to crypto companies, for answers regarding its role in facilitating these transfers.

S&K Take: Silvergate Bank is suffering some (potentially serious) collateral damage from the FTX fallout, previously being named in a lawsuit and now being scrutinized by the US Senate. Allegations are essentially that Silvergate, which facilitated a significant amount of the transfers that went from customers to either FTX or Alameda, had an obligation to consider whether those transfers were legitimate in light of the circumstances. We would imagine that this is only the start of the finger-pointing related to FTX, which will likely be exacerbated by SBF’s testimony in front of Congress next week.

U.S. Court Weighs Novel Issue of Crypto Ownership in Bankruptcy | Reuters

For the first time, a U.S. bankruptcy court is considering who owns bitcoin and other digital assets when a digital asset exchange freezes custodial accounts, using the Celsius case as the precedent-setter.

Bankruptcy Judge Orders $44 Million in Crypto to be Returned to Celsius Customers | Cointelegraph

A federal bankruptcy judge has ordered crypto lender Celsius to return crypto, held within custody accounts, to the lender’s customers. The $44 million that will be returned is only a fraction of the billions that Celsius owes its creditors.

S&K Take: The crypto “customer property” issue is finally getting its day in court, at least in the Celsius cases. The issue has been discussed in connection with each crypto platform bankruptcy, and rightfully so. Who has title to cryptoassets on the various platforms – the customer or the platform -- is an open legal question that is critical to resolving each case. The difficult part is that the inquiry is fact intensive. Celsius, for example, has different customer relationships across its different products. Terms of use/service within the same product can be different depending on when the customer transferred the crypto. So, this is certainly not an easy issue. Judge Glenn found that the “pure” custody assets, assets that never touched earn or any other Celsius accounts, can be returned. As the articles note, this represents only $44 million, a fraction of the assets in question. How the rest comes out remains to be seen.

Carvana Talking to Lawyers, Bankers About Debt Restructuring | Reuters

Carvana has opened discussions with lawyers and investment bankers about options for a debt restructuring, as the largest creditors of the online used car retailer have signed a deal binding them to act together in negotiations with the company. The deal includes large private equity and investment management firms that hold about 70% of Carvana’s unsecured debt ($4 billion).

S&K Take: In non-crypto news, Carvana is the hot new name on the restructuring scene, with the company and various constituencies lawyers (and advisoring) up. The big news was that Apollo and Pimco executed a three month cooperation agreement, with the word being that those two alone held a combined $4 billion in unsecured debt. Most definitely a case worth watching.

Alex Jones Files for Bankruptcy Following $1.5 Billion Sandy Hook Verdicts | Reuters

Alex Jones filed for Chapter 11 bankruptcy last week to protect himself from creditors, following the $1.5 billion payment he and the parent company of his website Infowars were ordered to pay due to his peddling of conspiracy theories regarding the Sandy Hook shooting.

S&K Take: We have covered the Alex Jones/Infowars saga in these pages and noted previously that an Alex Jones chapter 11 seemed like a fait accompli. That prediction was certainly somewhere south of being bold, particularly considering that Jones is facing $1.5 billion in judgments stemming from his public statements about Sandy Hook and its victims. The cases related to Jones have a bumpy history to say the least, so we would expect this one to be interesting. Hopefully there will be some resolution that compensates victims that suffered so Jones could profit.