1 month ago
12 ARTICLE AD
FTX’s new administration has filed a motion seeking court approval for a settlement agreement with Caroline Ellison.
Key Notes
Caroline Ellison could be selling all assets forfeited in the criminal case or used for legal fees owed to FTX creditors.The settlement motion states that after fulfilling the terms, Ellison will have no remaining assets except for personal property.FTX had previously sued Ellison, seeking to recover $22.5 million in bonus payments and alleging fraudulent transfers.In the latest development, the new FTX administration has filed a motion while seeking a settlement agreement with Caroline Ellison, the former boss at Alameda Research, which could probably mean her selling all of her assets.
Filed on Monday, October 7, the motion requests the court to authorize the settlement with Caroline Ellison. Previously, the Alameda Research boss agreed to transfer any of her assets forfeited to the US government in the criminal case or given as legal fees to the FTX creditors.
Furthermore, the motion adds that once she meets the terms, “Ellison will have no remaining assets other than certain physical personal property”. However, the motion doesn’t specify the value of the assets that Ellison would forfeit.
Additionally, Ellison agreed to assist with the investigations along with the court cases which involved bankrupt crypto exchange. This might involve sharing documents and insights from her time as the former head of FTX’s sister trading firm and as the ex-girlfriend of the exchange’s founder Sam Bankman-Fried.
Furthermore, FTX contended that the settlement would be advantageous while continuing to pursue Ellison in a related case since it offers “substantially all that they could recover” while her further cooperation would bring additional value.
They pointed out that pursuing litigation would only drain Ellison’s remaining resources and require both time and money.
FTX and Its Lawsuit against Caroline Ellison
Last year in July 2023, crypto exchange FTX’s bankruptcy estate filed a lawsuit against Caroline Ellison alleging waste of corporate assets, breaches of fiduciary duties, and fraudulent transfers. The lawsuit seeks to recover $22.5 million in bonus payments from February 2022 and $6.3 million from 2021. Additionally, the filing alleges that call options and FTX equity were fraudulently transferred to Ellison.
As per the latest details, a hearing on the proposed settlement shall happen by November 20. So far, Ellison has completely cooperated with federal prosecutors in the criminal case against Sam Bankman-Fried. As part of her cooperation, the judge reduced her sentence to two years, handed over last month on September 24.
On October 7, Bankruptcy Judge John Dorsey approved FTX’s bankruptcy plan, allowing former customers and crypto holders to recover between 118% and 142% of the value of their claims as of November 2022, when FTX filed for bankruptcy.
As part of the court-approved payout plan, the FTX creditors will receive more than $12 billion in the coming months. This has led many analysts to think that some of the cash can move back into digital assets. Benjamin Celermajer, co-chief investment officer at Magnet Capital said that the anticipated FTX payouts are “effectively giving liquidity to known crypto traders. It’s very likely that we see some of this flow back into crypto, providing a potential price catalyst to liquidity-starved markets”.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
FTX (FTT) News, Cryptocurrency News, News
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
