Sam Bankman-Fried petitions court to prioritize reimbursing his legal fees

Sam Bankman-Fried seeks to use FTX's insurance policies to cover his legal expenses, according to a court filing on March 15.

Legal counsel to the former CEO of FTX requested in a motion that insurers be allowed to advance or reimburse their defense costs and fees under directors and officers (D&O) insurance policies maintained with Relm Insurance and Beazley Insurance. According to the filing, the policies "provide payment priority to individual policyholders with uncompensated losses like Mr. Bankman-Fried." Which means the former CEO would be at the top of FTX's pay list.

"Based on the foregoing, Mr. Bankman-Fried asserts that there are sufficient grounds to lift and modify the automatic stay [...] to enable Relm and Beazley to (a) reimburse Mr. Bankman-Fried for Covered Defense Costs already incurred under the D&O Policies, and (b) advance future Covered Defense Costs unless and until that the Defense Costs no longer qualify as Non-Compensable Losses under the terms of the D&O.”

According According to Investopedia, directors' and officers' liability insurance is intended to "protect individuals from personal loss if they are sued as a result of their performance as a director or officer of a company or other type of organization," including coverage of legal fees and other costs as a result of a lawsuit.

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Responses or objections to the motion must be filed by March 29, 2023. If necessary, a hearing will be held on April 12, 2023 in the United States Bankruptcy Court for the District of Delaware. If no responses or objections are filed, Bankman-Fried asks the court to grant the request for relief without notice.

Bankman-Fried's attorney noted that "there are multiple criminal, regulatory, insolvency-related and civil actions" involving the former CEO, including one criminal lawsuit, three federal and state regulatory lawsuits, and five insolvency-related lawsuits, as well as seven legal processes. behavior.

On February 23, Bankman-Fried was charged with four new criminal charges by a federal judge presiding over his case, totaling 12 criminal counts against him, including eight counts of fraud-related conspiracy, as well as four counts of wire fraud and securities fraud. His legal costs are estimated to be in the nine-figure range.

Cointelegraph previously reported that law firms, investment banks, and consulting firms are working with FTX on its bankruptcy case. billed the crypto exchange a combined total of $34.18 million in January. FTX's director of restructuring and new CEO, John J. Ray III, also received a substantial salary, charging $1,300 an hour, for a total of $305,000.