Judge Appoints Trustee in Synapse Bankruptcy Mess

Source: American Prospect
by David Dayen

“A federal bankruptcy judge appointed an independent Chapter 11 trustee to failed fintech middleman Synapse on Friday, as more than 200,000 customers still await access to their money. The company had planned ‘to terminate all employees by close of business today’, according to one of its attorneys who participated in a Zoom-only hearing on Friday. Synapse has drained all of its assets and even before today was operating with a skeleton crew. ‘All our funds are gone, Your Honor’, said one of its attorneys. Meanwhile, CEO Sankaet Pathak called into the bankruptcy hearing from Santorini island in Greece, and the general counsel Tracey Guerin was in Rome. Synapse’s chaotic bankruptcy, and particularly the collapse of a deal to buy its assets out of the Chapter 11 process, has led to customers of fintech companies who worked with Synapse being locked out of their bank-like accounts for nearly two weeks.” (05/24/24)