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FTX gets approval of settlement with SBF, others over Embed buyout
By Sarah Lizee
Olympia, Wash., Jan. 18 – FTX Trading Ltd. received approval of a settlement agreement with defendants Samuel Bankman-Fried, Nishad Singh and Gary Wang to resolve an adversary proceeding relating to the acquisition of Embed Financial Technologies, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.
Under the settlement agreement, the FTX debtors will recover 100% of the value that the defendants obtained in connection with the Embed acquisition and also all assets held under the defendants' names at Embed.
The settlement agreement will not affect, compromise or release any claims the FTX debtors have against the defendants of any kind other than those claims specified in the settlement agreement for the Embed avoidance action, FTX said.
“This agreement is in the best interests of the FTX debtors' estate, creditors and stakeholders,” John J. Ray III, chief executive officer and chief restructuring officer of the FTX debtors, said in a December press release.
“This agreement allows us to take further steps to resolve matters at Embed and at the same time, we are not inhibited in any way as we pursue additional outstanding claims in parallel and advance the work underway to maximize recoveries for creditors.”
As background, on May 17, 2023, FTX started the adversary proceeding against Bankman-Fried, Singh and Wang by filing a complaint that sought to avoid and recover transfers made by FTX to the defendants with regard to the June 2022 acquisition of Embed by debtor West Realm Shires, Inc. and to avoid any obligation by West Realm Shires relating to the Embed acquisition.
FTX has headquarters in the Bahamas and filed Chapter 11 bankruptcy on Nov. 11, 2022 under case number 22-11068.
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