Former top Alameda Research co-CEO Sam Trabucco has settled worth millions in asset forfeitures as part of the FTX bankruptcy.
Trabucco will also turn over his 53-foot yacht, which cost $2.51 million, and two San Francisco apartments worth $8.7 million. The term of this settlement reflects that it serves the interests of FTX’s creditors and does not involve expensive litigation.
It’s part of FTX’s ongoing effort to get money back for creditors after its collapse. That move is part of FTX’s broader legal strategy to find the underwater funds.
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These properties are part of this settlement, which shows that Alameda’s execs have a pretty heavy financial footprint in this settlement — that is, while the exchange was up and running.
Losing luxury assets is part of a squeeze on former executives to help creditors pay back money. Former Alameda Research employee Trabucco, a close associate of FTX founder Sam Bankman-Fried, left the firm in August 2022.
Trabucco announced last year that he had just bought a boat not long before the exchange collapsed, his departure occurring before that.
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Sam Trabucco Forfeits $70M in Settlement
Trabucco will also forfeit his right to $70 million in related claims in the FTX settlement. These claims were first filed at the end of June 2023 and concerned his various financial interests within FTX, Alameda Research, and related entities. This will nullify the claims that would otherwise exist to benefit FTX’s estate and limit the claims pool.
Simplifying FTX’s restructuring plan, approved in October by a U.S. bankruptcy judge, these claims are removed from the case. This plan allows a vast majority of the creditors to receive cash over 100% of their claim value.
The court-approved plan, however, aims to see as much financial recovery as possible, and some creditors have complained that they would prefer to receive cash rather than cryptocurrency.
Some former FTX executives have taken a cooperative stance by relinquishing claims to move along the creditor recovery process as fast as possible.
Trabucco’s forfeiture means the FTX estate has one less legal obstacle and more money in its bank account. That’s the cooperative approach the estate has taken in the ongoing legal actions to maximize creditor recovery.
FTX Sues Binance and Zhao for Fraud
FTX has filed several lawsuits to get the money back or to address a claim of mishandling. Recently, FTX has sued Binance, the exchange, and Changpeng Zhao, its founder and former CEO, on charges of fraud and market manipulation.
The lawsuit centers on a share buyback deal between FTX and Binance signed by FTX in 2021, which FTX now argues made matters worse.
Besides Binance, FTX has been targeting other investors like SkyBridge Capital, founded by Anthony Scaramucci, in its recovery efforts. The lawsuits seeking to recoup investments FTX claims could have been better stewarded, hurting its finances.
FTX’s legal team is pursuing these actions to provide creditors with more substantial returns, or at least in the very long process of a bankruptcy proceeding, more likely to be recovered.
However, other recoverable assets, like other cryptocurrencies, were also in FTX’s sights for pursuing law claims.
FTX’s comprehensive strategy on creditor recovery in the face of a challenging market climate and legal complexities is very much this. But with more settlements and judgments reached, FTX anticipates its financial recovery framework will improve, finally moving closer to clearing up its bankruptcy proceedings.
