- Terraform Labs gains court approval to hire Dentons for its defense against an SEC lawsuit.
- Dentons agrees to refund $48M of the legal fees pre-paid by Terraform.
- Despite settling most legal expense disputes, Terraform faces continued scrutiny over funds allocated for founder Do Kwon’s legal defense.
In a legal development, Terraform Labs has secured approval from a U.S. bankruptcy judge to appoint Dentons for its defense against a lawsuit filed by the U.S. SEC. This decision came after Dentons agreed to refund $48 million of the legal fees pre-paid by Terraform.
The ruling, delivered by Judge Brendan Shannon in Wilmington, Delaware, underscored the importance of Terraform’s legal representation as a justified expenditure of the company’s constrained resources.
The controversy surrounding Dentons’ substantial retainer involved objections from Terraform’s creditors, the SEC, and the Office of the U.S. Trustee. Critics argued that Terraform’s transfer of $166 million to Dentons since early 2023 diverted crucial funds from creditors and evaded bankruptcy court supervision. According to a report by Reuters, the concerns centered on the more than $70 million in…
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