FTX Seeks Settlement with Caroline Ellison, Demanding Asset Turnover

FTX has filed a motion to settle with Caroline Ellison, the former Alameda Research CEO, requiring her to relinquish nearly all her assets.

The October 7 motion seeks court approval for Ellison to transfer any remaining assets not subject to government forfeiture or legal fees to FTX creditors.

If approved, Ellison will retain only certain personal items, although the value of the assets to be surrendered is not disclosed. She has agreed to assist FTX with its investigations and legal cases, leveraging her experience at Alameda and her previous relationship with FTX founder Sam Bankman-Fried.

FTX argues that the settlement is more beneficial than pursuing litigation, which could deplete Ellison’s resources. In July 2023, FTX’s bankruptcy estate sued her for fiduciary violations and fraudulent transfers, seeking to recover $22.5 million in bonuses from 2022 and $6.3 million from 2021, alongside other improperly received assets.

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A hearing on the settlement is scheduled for November 20. Ellison has cooperated with federal prosecutors, receiving a two-year sentence in September for her role in the fraud. On the same day, Bankruptcy Judge John Dorsey approved FTX’s bankruptcy plan, allowing former customers to recover between 118% and 142% of their claims from November 2022.

Source

Kosta Gushterov