FTX has requested court approval for a settlement that requires former Alameda Research CEO Caroline Ellison to transfer nearly all her assets to FTX creditors.
The motion, which was submitted on Oct. 7, requests authorization for the settlement in which Ellison agrees to transfer any assets not forfeited to the government in her criminal case or used for legal fees. The document noted that once the terms are met, “Ellison will have no remaining assets other than certain physical personal property.” Still, it did not specify the value of the assets involved.
Ellison has also agreed to cooperate with FTX’s investigations and legal proceedings. This may include sharing documents or information she obtained during her tenure as head of Alameda Research and as a former FTX founder Sam Bankman-Fried associate.
FTX stated that the settlement is as beneficial as pursuing her in a separate court case, as it “will recover substantially all of Ellison’s assets,” and her cooperation adds significant value. The company noted that litigation would deplete Ellison’s remaining resources and incur additional costs.
In July 2023, FTX’s bankruptcy estate sued Ellison, alleging breaches of fiduciary duties, waste of corporate assets, and fraudulent transfers. They sought to recover $22.5 million in bonus payments from February 2022 and $6.3 million in bonus payments from 2021. The latest filing also mentions call options and FTX equity allegedly transferred to Ellison. A hearing on the proposed settlement is scheduled for November 20.
Ellison has cooperated with federal prosecutors in the criminal case against Bankman-Fried and received a reduced sentence of two years on September 24 for her role in the case.
On October 7, Bankruptcy Judge John Dorsey approved FTX’s bankruptcy plan. Former customers and crypto holders are expected to recover between 118% and 142% of the value of their claims as of November 2022, when FTX filed for bankruptcy.
Edited by Stacy Elliott.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Source: https://decrypt.co/285363/ftx-settlement-caroline-ellison-assets
