Terraform Labs Allowed to Hire Law Firm Dentons in Bankruptcy Case by U.S. Court: Reuters
Terraform Labs has been permitted by a U.S. court to hire law firm Dentons for a lawsuit initiated by the U.S. Securities & Exchange Commission (SEC) and its co-founder Do Kwon. Previously, Terraform's creditors, the SEC, and the U.S. Justice Department had opposed Terraform's decision to hire Dentons following its bankruptcy filing in January 2024. They were concerned about Terraform's $166 million retainer payments to its lawyers since 2023, which they believed were out of their creditors' reach. However, U.S. Bankruptcy Judge Brendan Shannon ruled these legal costs as a necessary and appropriate use of Terraform's limited resources. Dentons has agreed to return $48 million to Terraform and accept more oversight from the bankruptcy court. Terraform Labs, the developer of the failed Terra platform and its LUNA tokens, saw the project collapse in May 2022, leading to a 99% drop in LUNA's value.
