Sam Bankman-Fried is fighting to retain control of his some $450 million worth of Robinhood stock prosecutors staked claim over on Wednesday, a new court filing shows.
The Department of Justice, which moved to take custody of the shares Wednesday, claims the stock should not be included in FTX’s bankruptcy proceedings. Meanwhile, FTX’s creditors hope the shares can help make them whole, and Bankman-Fried said he needs the funds to cover his legal fees.
“Mr. Bankman-Fried requires some of these funds to pay for his criminal defense,” the filing read, noting that the disgraced FTX founder is “facing potential criminal liability.” Bankman-Fried pleaded not guilty to all charges, including wire fraud and campaign finance violations, in New York Tuesday.
Bankman-Fried’s move is the latest in an ongoing ownership dispute over the shares. The equities, once worth more than $600 million, have plunged since they’ve been stuck in legal limbo.
More than 56 million Robinhood shares are on the line, worth a little more than $450 million as of Friday’s prices, Thursday’s court filing revealed. The shares belong to Emergent Fidelity Technologies, of which Bankman-Fried is the 90% stockholder, the filing added.
In May 2022, “Mr. Bankman-Fried and Zixiao (“Gary”) Wang borrowed the funds for Emergent to purchase the Robinhood Shares from Alameda,” the filing read.
Representing Bankman-Fried in the bankruptcy proceedings is Gregory T. Donilon from Montgomery McCracken Walker & Rhoads LLP.
Bankman-Fried’s criminal lawyers are Cohen & Gresser’s Christian R. Everdell and Mark Stewart Cohen, who recently represented Ghislaine Maxwell in her sex trafficking case.
Bankman-Fried’s personal legal fees are not public, but Sullivan and Cromwell LLC, the firm leading FTX’s restructuring, accepted a $12 million retainer from the exchange before it filed for Chapter 11 on Nov. 11, 2022. As of Nov. 3, 2022, the firm had already cashed in more than $3.4 million of its retainer, nearly 30%.
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Source: https://blockworks.co/news/sbf-needs-robinhood-shares-for-legal-defense