Yahoo Finance’s Alexis Keenan joins the Live show to discuss the expectations for FTX’s bankruptcy court hearing on Tuesday.

Video Transcript

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BRAD SMITH: FTX is expected to make its first appearance in bankruptcy court today in an attempt to recount what led to the fallout of the company. High stakes for the crypto exchange with filings showing numerous creditors are due hefty sums here.

For more, let's bring in Yahoo Finance's Alexis Keenan. Alexis, what do we know from the legal proceedings that are about to commence here?

ALEXIS KEENAN: Yeah, Brad, a lot at stake here. So FTX's attorneys and its managers, they'll appear in bankruptcy court in Delaware-- that's where this case is being handled-- at 11:00 AM Eastern time today. And what they're gonna do is they're gonna make a series of requests to spend what's left of the company's money. Traditionally, in a bankruptcy case, this would have happened already within days.

And what the management needs is approval to pay its lawyers, its bankers, its employees, some of whom-- many of whom have already left the company, and also things like utilities. Let's just keep the lights on. That's what they need here.

You can expect to hear also a narrative of FTX's collapse in this hearing. And also the steps that the company is making to shore up its assets. Now, as for its broader financial health, we're getting glimpses of that. But the picture is still far from complete.

The CEO of the company John J. Ray, he said that the company might need until January to complete that picture, to tabulate the company's assets and liabilities. The reasons cited there, last week, Ray had said that he was looking at a complete failure of corporate controls and also an absence of trustworthy financial information that existed at the company.

Though, in a filing on Saturday, FTX identified 216 bank accounts that hold approximately $564 million. The company also identified its top 50 creditors. These were all customers of FTX. And they owned, the company said, a collective $3.1 billion.

Now, here's the problem. The company further identified some of its cash on hand. Its combined cash balance, it said, was $1.2 billion. So we'll be watching in this hearing for what exactly the finances look like at this date and time. But we're certainly not expecting to get a whole picture today.

JULIE HYMAN: Yeah, especially since John J. Ray had said what a mess the finances were, right? That it's gonna take some time.

Talk to us about sort of the logistics or what we need to know today. When does this thing start? How long could it last? And who else is testifying? I mean, Sam Bankman-Fried, this is not-- we won't be hearing from him today, right?

ALEXIS KEENAN: No, no, that's not expected. And this is really an omnibus procedure in bankruptcy court. Like I said, this would have usually happened within days of the filing. And the delay of it just speaks to how disorganized this company's finances are and its accounting across the board really must be.

Now, we might learn a little bit more at 11:00 AM. That's when this starts. And Julie, how long it goes, it shouldn't take the entire day. Although, the complexity of this case, I could see it definitely going until the court closes, probably around 5:00 PM.

We might learn, though, more about the $477 million in unauthorized transfers that went from FTX's Bahamas entity, that FTX Digital Markets right after the bankruptcy was filed, that flowed out of the company. Now, that entity is not part of the bankruptcy estate-- or the bankruptcy filing in the US. It's now managed by liquidators in the Bahamas.

It's said to have once held about $16 billion. And the Bahamas Security Commission, the regulator there, they said they indeed authorized that transfer. But that they only authorized it so far as to go into a government wallet for safekeeping.

We should also expect there to be some jurisdictional issues, perhaps, because the Bahamas authorities have said that local-- the local entity is the one that controls the entire business. So we could definitely see a fight over where all of these bankruptcy proceedings across the board, across entities, will end up playing out, the US or the Bahamas.

JULIE HYMAN: And people who are missing their funds are going to be watching all of this very closely, as we will be. Thanks so much, Alexis. Appreciate it.