Back to the Blog Main Page
09/10/24
80
FTX Seeks Court Approval for Settlement with Ex-CEO Ellison to Repay Creditors
FTX has initiated a motion to secure court approval for a settlement agreement with former Alameda Research CEO Caroline Ellison. This agreement would require Ellison to surrender nearly all remaining personal assets not already seized by the government in connection to her criminal case or used for legal expenses. Filed on October 7, the motion emphasizes the intention to direct these assets towards the repayment of FTX creditors.
The legal document outlines that once the settlement conditions are fulfilled, Ellison will retain only a small amount of personal property, with the exact valuation of forfeited assets left undisclosed. As part of the settlement, she has also consented to assist the ongoing investigations and any litigation related to the bankruptcy of FTX, which may involve providing documents or insights from her experience leading Alameda and her previous relationship with Sam Bankman-Fried.
FTX posits that this arrangement is as advantageous as pursuing litigation against Ellison, as it allows them to recover nearly all potential assets effectively. The bankruptcy estate has previously taken legal action against Ellison, Bankman-Fried, and other executives, alleging misconduct including breaches of fiduciary duty, misuse of corporate funds, and illegitimate asset transfers. The bankruptcy estate is aiming to recover significant funds, including about $22.5 million in bonuses from early 2022 and $6.3 million from 2021.
A court hearing regarding the proposed settlement is slated for November 20. Notably, Ellison’s cooperation with federal prosecutors in the case against Bankman-Fried led to a reduced sentencing of two years, highlighting her pivotal role in the ongoing legal matters. Furthermore, on the same day as the FTX motion, the bankruptcy judge approved a plan that promises former customers and crypto investors a recovery rate projected between 118% and 142% of their claims as of the company’s bankruptcy filing in November 2022.
Promotions
