- In a Bankruptcy Court proceeding on Wednesday, the Judge cancelled the naming rights between the embattled crypto exchange FX and Miami Heat’s home arena.
- The Miami Heat Arena is free to look for new partners and bidders for the structure.
- The Miami-Dade officials filed a motion on November 22 to cancel the contract after FTX filed for chapter 11 bankruptcy protection.
The naming rights agreements between the embattled crypto exchange FTX and the Miami Heat’s Arena are no more. On Wednesday, a Florida judge in the Bankruptcy Court of Delaware canceled the deal as the Miami Heat Arena is now free to look for new partners and bidders for the structure.
The information comes after a court hearing in the Bankruptcy Court of Delaware, where lawyers stipulated that the funds from Alameda Research were used to finance the deal with Miami-Dade county.
On November 22, the Miami-Dade officials filed for a motion to cancel the contract after the crypto exchange platform filed for chapter 11 bankruptcy protection and were approved to take down FTX’s signage from the arena.
Miami Heat NBA agreement
The county and the former FTX chief executive Sam Bankman-Fried, negotiated a 19-year deal at $135 million, where the Miami heat was going to receive $2 million a year as part of the deal, which commenced in June 2021. The value raised many concerns in the crypto space, not only because of its dollar amount but also because the firm had been around for two years after its launch in 2019.
However, the legal analyst David Weinstein told the Local news that,
“Their short-term aim, by filing their motion and becoming the recipients of the motion granting, is that it will cease to be the FTX arena. They will have whatever remedies available under the agreement to recover the lost money. Given how everything occurred with this, it is one of those circumstances where you cut links, put them behind you, and move forward.”
The Miami-Dade will now determine whether to keep the money it has received from the exchange or send it back to the bankruptcy court in charge of the case. The crypto firm had paid $20 million from the original deal, and the 2023 rent of $5.5 million was due on January 1. Weinstein further stated that,
“On Miami-Dade’s decision on whether to keep the money or take it back to the court in charge of the case, that is something for the court to oversee how (Miami-Dade) obtained the money, whether they did their due diligence or not, whether they were duped like any other investor in this alleged Ponzi scheme. And whether they have a good faith basis for saying we received that money or not.”
However, the court ruling was retroactive to December 31, 2023, as parties can dispute other issues involving the contract terms.
Nonetheless, it is yet to be clear how quickly the name will be removed and what it will be renamed. Removing the name will be a big task as FTX’s name currently appears on the roof, the court, on staff work attire, and advertising throughout the stadium.
FTX was one of the largest global crypto exchanges before its downfall as it filed for bankruptcy protection in early November, and Sam Bankman-Fried stepped down as the company’s chief executive. However, the former CEO of the exchange, SBF, was arrested in the Bahamas in December, facing several criminal charges, to which he pleaded not guilty early this month.
