FTX lawyers, creditors slam SBF’s petition to get legal fees reimbursed

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A new petition seeking reimbursement of Sam Bankman-Fried’s legal costs has faced fierce opposition from lawyers representing crypto exchanges and their creditors’ committees.

According to an earlier Cointelegraph report, Bankman-Fried’s attorneys filed a motion on March 15 seeking directors and officers (D&O) insurance to cover his legal costs. payment queue.

March 29 Objected filingFTX attorneys objected to Bankman-Fried’s attempts to prioritize his own attorney fees at the expense of other potential claimants, stating:

“It would be unfair, unfair and contrary to the interests of justice to allow Mr. Bankman-Fried to exhaust the D&O policy for his sole benefit.”

FTX’s attorneys argue that if the court rules in Bankman-Fried’s favor, the insurance payment should apply to other directors and officers with claims on the funds.

Official Committees of Unsecured Creditors submitted On the same day, it noted that the D&O insurance policy only applies “when making honest decisions in the ordinary course of business”, arguing “that is not the case” with respect to Bankman-Fried’s request.

The commission argued that the court should deny the request, labeling Bankman-Fried “the alleged perpetrator of one of the greatest criminal frauds of the last decade.”

This sentiment was echoed by some in the cryptocurrency community prior to Sam Bankman-Fried’s request.

Directors and Officers (D&O) liability insurance is a type of insurance that protects individuals against personal losses if they are sued as a result of serving as a director or officer of a company. Such policies may also be used to cover attorneys’ fees and costs incurred as a result of litigation against former officers or directors.

However, the creditors panel argued that Bankman-Fried failed to justify his claim for available $10 million in compensation, which would instead be used to cover FTX’s losses.

Related: SBF banned from using online messengers under new bail deal

According to reports, the former FTX CEO is now paying his legal fees with the $10 million he previously gave his father, Joseph Bankman, after Bankman-Fried loaned him money from Alameda Research.

Bankman-Fried was indicted on 22 February on 12 counts, including a number of fraud charges, and on 28 February on a dozen charges after allegations that he used $40 million to try to bribe Chinese officials. was rounded up to the charges of