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SBF Wants FTX to Cover up to $5M of His Legal Fees
SBF is arguing that he is entitled to $5 million Directors and Officers Insurance from FTX.
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On Wednesday, March 15th, Sam Bankman-Fried’s legal counsel requested FTX’s insurance policy to cover some of the former CEO’s legal fees. The filing numbered 964 on the website of the restructuring advisor Kroll, is primarily leaning on the company’s D&O—Directors and Officers insurance policy.
SBF Wants FTX To Cover Some of His Legal Fees
According to a filing from Wednesday, March 15th, Sam Bankman-Fried is requesting the court make a decision on whether FTX’s D&O shall cover his legal bills. According to the document, the debtors—the company and its bankruptcy management—have failed to comply with what SBF’s legal team considers to be proper procedure and believe he is entitled to company insurance. If granted, Bankman-Fried will have priority to receive up to $5 million in order to cover his legal fees.
SBF, who has previously claimed to have only $100 thousand left to his name, has already made attempts to raise money for his legal fees. In early January, he tried to keep his 56 million Robinhood shares away from creditors. Later that same month, a luxury property belonging to the Bankman-Frieds went on sale for just $3 million.
FTX’s co-founder and former CEO is scheduled to go to trial in October of this year. He is facing an onslaught of civil and criminal charges from numerous US agencies including the CFTC, the SEC, and the DoJ. After Nishad Singh pleaded guilty in February, Sam Bankman-Fried became the only senior FTX executive still claiming innocence.
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FTX’s Customers Still a Long Way From Being Made Whole
While Sam Bankman-Fried is trying to claim $5 million from FTX’s insurance policy, the search for the company’s missing assets remains far from over. The firm’s new management headed by John J. Ray III already published two updates on the state of its quest, both times claiming there is still a “massive shortfall”.
Alameda Research, one of the bankrupt entities of the FTX group, recently filed a lawsuit against Grayscale seeking to both to lower “exorbitant” fees, and recover at least $9 billion worth of assets. Soon after taking over, Ray stated that one of the main reasons why it is so difficult to locate and secure assets is the fact that the previous management had next to no record-keeping procedures.
Some entities of the FTX Group have, however, resumed withdrawals for their customers. On February 20th, FTX Japan announced that its customers’ fiat currency, as well as digital assets, will be available to users a day later. Additionally, while the search for funds has identified the shortfall, the bankruptcy bills for the company continue piling up as restructuring advisors charged more than $38 million for their services in January alone.
Do you think SBF’s legal fees should be covered by FTX’s D&O insurance? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
