SBF Goes to Court to Block FTX Debtors From Seizing $450M in Robinhood Shares
Sam Bankman-Fried has filed a court action seeking to block FTX debtors from controlling over $450 million in Robinhood shares. He claims he needs the funds to pay for his legal fees.
Sam Bankman-Fried (SBF), the co-founder and former CEO of the financially embattled FTX, has filed a court action seeking to block an earlier motion by debtors of the crypto exchange to seize an estimated $450 million in Robinhood shares.
Mr Bankman-Fired filed the opposition at the US Bankruptcy Court for the District of Delaware ‘respectfully’ requesting that the stay motion by FTX’s debtors be denied because they are ‘effectively advancing an argument for a preliminary injunction but have failed to carry their heavy burden of establishing that such an extraordinary remedy is warranted.’
FTX Debtors are Disregarding the Separate Existence of a Corporation
The court filing by SBF adds that FTX’s debtors are assuming that an automatic stay on the assets is part of routine bankruptcy proceedings. However, they are disregarding the existence of a separate corporate entity, Emergent Fidelity Technology Ltd., which owns the Robinhood shares yet is not part of the ongoing FTX bankruptcy.
‘In effect, the FTX Debtors seek to encumber 56,273,269 shares of Robinhood Markets, Inc.’s Class A Common Stock that are not owned by Alameda Research Limited or any other entity implicated in the FTX bankruptcy and are instead owned by Emergent. Emergent’s independent acquisition of the Robinhood Shares is clearly set forth in an SEC filing made by Ryne Miller, General Counsel of FTX and former partner at Sullivan & Cromwell LLP,’ the court document explains.
SBF is, in turn, a 90% shareholder of Emergent. However, SBF’s court filing points out that he and Gary Wang borrowed funds from Alameda Research to finance the purchase of the Robinhood shares by Emergent. The loans were ‘memorialised in four different promissory notes’ of which FTX debtors are aware.
SBF Needs the Robinhood Shares to Fund His Legal Expenses
As to why SBF is fighting hard for the Robinhood shares, the court filing adds that he needs the funds to finance his ongoing legal expenses.
‘Alienating this property from Emergent will render it inaccessible to Mr Bankman-Fried, who is presently facing potential criminal liability. Mr Bankman-Fried requires some of these funds to pay for his criminal defence,’ says the court document.
~By John P. Njui~
