Pay my legal bills before anyone else, Sam Bankman-Fried tells FTX

Pay my legal bills before anyone else, Sam Bankman-Fried tells FTX

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Sam Bankman-Fried wants FTX’s new management to make paying his legal fees a priority – putting him at the top of the payout list.

Specifically, SBF is asking the bankruptcy court to grant it access to FTX’s $10 million director and officer insurance policies.

These cover legal costs not incurred by the company for “any losses … which the insured persons are required by law to pay as a result of a claim first made against them … for an wrongful act,” the filing states .

In addition, “the insurance company is offering payment priority for individual insureds with uncompensated damages such as Mr. Bankman-Fried” and is asking the company to waive any objection to those payments. It added:

That means Bankman-Fried could receive a million-dollar payout before anyone else in the bankruptcy case sees a penny.

The D&O coverage is required, the filing states, because the disgraced founder and former CEO of FTX “has been named as a defendant or is otherwise involved in criminal, regulatory, civil and other lawsuits and proceedings leading to — and are likely to continue to result in significant unrecoverable attorneys’ fees and other costs.”

His criminal defense alone is said to amount to several million dollars.

SBF faces 12 charges, including multiple counts of fraud and conspiracy and violations of the Anti-Money Laundering and Campaign Finance Act, in connection with the alleged theft of $10 billion worth of FTX client funds to prevent his private Trading company Alameda Research goes bankrupt. At least $8 billion appears to have been lost and three former top executives at the two companies have pleaded guilty to the fraud charges.

D&O policies are common and in many cases – including this one, according to the filing – offer benefits to the company, but only after the claims of the primary executives have been paid.

Along with the federal criminal charges, the filing shows that Bankman-Fried is facing three lawsuits from regulators – including the Securities and Exchange Commission, the Commodity Futures Trading Commission and the Texas State Securities Board. Then there are the five bankruptcy-related cases and seven civil claims.