Episode Description: The Turnaround Specialist: John Ray and the Bankruptcy of FTX

In this episode, we sit down with John Ray, an emergency CEO and turnaround specialist who is currently overseeing the bankruptcy of FTX, a cryptocurrency exchange. With a reputation for tackling companies in financial and legal trouble, including Enron and Nortel Networks, Ray brings his tenacity and aggressive approach to solving problems to the table.

Ray begins by discussing the three common reasons for bankruptcy: over-leverage, fraud, and plain stupidity. In the case of FTX, he highlights the company's failure as a result of a complete absence of trustworthy financial information and a lack of corporate controls. As the emergency CEO, Ray's primary objective is to maximize value for creditors and find the best alternative for them.

Unlike a regular CEO, Ray does not have a predetermined plan for FTX's future. However, he is considering the possibility of restarting the exchange. He believes that being an emergency CEO offers more flexibility and the ability to make quick decisions, which can be crucial in a crisis situation.

If you're interested in the world of corporate turnarounds and the challenges faced by companies on the brink of bankruptcy, this episode provides valuable insights from a seasoned professional. Join us as we delve into the mind of John Ray and explore the intricacies of the FTX bankruptcy.

John Ray is an emergency C.E.O., a bankruptcy expert who takes over companies that have succumbed to failure or fraud. He’s currently cleaning up the mess left by alleged crypto scammer Sam Bankman-Fried. And he loves it.

RESOURCES:

• "United States of America v. Samuel Bankman-Fried, a/k/a 'SBF,'" by the United States District Court Southern District of New York (2023).
• "Does FTX’s New CEO Have the Worst Job in Corporate America?" by Ben Cohen (The Wall Street Journal, 2022).
• "John J. Ray III, a St. Joseph’s Grad From Pittsfield, Is Earning $1,300 an Hour to Sort Out the Remains of the FTX Cryptocurrency Collapse," by Larry Parnass (The Berkshire Eagle, 2022).
• "'Pit Bull' Fights to Pick Up Enron's Pieces," by Ameet Sachdev (Chicago Tribune, 2007).

EXTRAS:

• “The Secret Life of a C.E.O.,” series by Freakonomics Radio (2018-2023).
• "Did Michael Lewis Just Get Lucky with Moneyball?" by Freakonomics Radio (2022).
• "Does the Crypto Crash Mean the Blockchain Is Over?" by Freakonomics Radio (2022).
• "What Can Blockchain Do for You?" series by Freakonomics Radio (2022).