SBF Wants Access to $450 Million in Robinhood Shares in FTX Bankruptcy Proceeding! Opposes Motion To Stay.

Why?

He needs the money to pay for his criminal defense.

As stated in SBF’s Opposition to Enforce The Stay, “Mr Bankman-Fried requires some of the funds to pay for his criminal defense”.

FTX debtors are asking the Delaware Bankruptcy Court to enforce a stay on 56 million Robinhood shares valued at approximately $450 million. Another words, to stop any act to possess (and potentially liquidate) the shares by anyone or any entity including SBF. Why? To preserve the shares in the event of a bankruptcy judgment to pay the FTX debtor claims.

However, SBF argues the FTX debtors have no legal claim to the Robinhood Shares as the shares are not an asset of Alameda Research or FTX, the named parties in the bankruptcy proceeding. SBF claims the shares are owned by a separate corporation, Emergent Fidelity Technology, which is not a party in the bankruptcy proceeding. SBF is 90% owner of Emergent.

Yet, here’s the rub…turns out, the funds used to purchase the shares came from Alameda Research, SBF’s crypto hedge fund and a party in the bankruptcy proceeding. Alameda is also allegedly involved in defrauding investors and lenders in a multiple count federal fraud indictment just filed last month against SBF in US District Court in New York.

Ah, but….SBF claims, in essence, that although the funds came from Alameda, the funds to purchase the shares actually came from loans made to individuals or entities evidenced by 4 promissory notes held by Alameda.

Loans to whom, you ask…(as stated in SBF’s opposition motion),

$1 Billion to Mr. Sam Bankman-Fried (SBF)

$ 2.3 Billion to Paper Bird, Inc.

$ 543 Million to Mr. Singh

$ 55 Million to Ryan Salame

No doubt, FTX debtors will likely argue the “creative financial structuring” amounts to a fraudulent transfer and the shares are legally owned by Alameda, thus, subject to a stay.

Interesting legal question….Can a defendant access a disputed bankruptcy asset to pay for their criminal defense?

Simply my opinion, What’s your analysis?

Will SBF get access to Robinhood Shares to pay for his criminal defense?