The post FTX News: Caroline Ellison Strikes Settlement Deal, Surrendering Nearly All Assets appeared first on Coinpedia Fintech News
Exciting news in the FTX bankruptcy case! Recently Caroline Ellison, former CEO of Alameda Research, has struck a settlement deal with FTX. Filed in court on October 7, the agreement means Ellison will hand over nearly all her assets to the FTX estate. This is a big win for FTX as it pushes forward in recovering funds for its creditors!
Details of the Settlement
The court documents from FTX say that Caroline Ellison has agreed to give up any assets that she hasn’t already lost to the government or used for her legal fees. After this transfer, she will keep just a few personal items, but we don’t know how much her other assets are worth.
Besides handing over her assets, Ellison has also promised to help with FTX’s ongoing investigations and legal cases. This might include sharing documents and information from her time as the head of Alameda Research and her relationship with Sam Bankman-Fried, FTX’s founder.
Rationale Behind the Settlement
FTX contends that this settlement is more advantageous than pursuing further litigation against Ellison. The motion highlights that the recovery from the settlement would yield “substantially all that they could recover” through a lengthy legal battle. FTX emphasized that continuing litigation would not only deplete Ellison’s remaining resources but also incur significant time and financial costs. The agreement allows for a quicker resolution to the recovery efforts, benefiting the creditors involved.
Background on the Legal Disputes
The lawsuit against Ellison, initiated by FTX’s bankruptcy estate in July 2023, accused her of breaches of fiduciary duties, waste of corporate assets, and fraudulent transfers. Specifically, the estate aimed to recover $22.5 million in bonuses issued in February 2022 and an additional $6.3 million from 2021. The suit also referenced call options and FTX equity that had been fraudulently transferred to Ellison.
Future Implications
A court hearing to discuss the proposed settlement is scheduled for November 20. Ellison’s cooperation with federal prosecutors in the criminal case against Bankman-Fried, which led to her receiving a reduced two-year sentence on September 24, adds another layer to the complexity of the ongoing FTX legal battle.
In a separate development, Bankruptcy Judge John Dorsey approved FTX’s bankruptcy plan on the same day the settlement was filed, indicating that former customers and crypto holders could recover between 118% and 142% of their claims as of November 2022, the date FTX filed for bankruptcy.