FTX Lawyers Seek Recovery of $323.5M from FTX Europe Leadership
Sam Bankman-Fried and the FTX Group have paid approximately $323.5 million for the acquisition of Swiss Company DAAG, which became FTX Europe. However, FTX’s lawyers are now asking a U.S. bankruptcy court to recover these funds from FTX Europe leadership. Here are the key points:
1. Lawyers representing FTX Trading Ltd. and Maclaurin Investments Ltd. are seeking the return of funds transferred to the leadership of FTX Europe.
2. The lawyers argue that FTX Europe has limited business and no intellectual property beyond a “business plan.”
3. The acquisition of DAAG was pursued to gain access to European regulators and obtain necessary licenses.
4. The FTX Europe leadership received excessive earn-out payments of nearly $100 million in connection with acquiring K-DNA for only €2 million.
5. The lawyers are also asking the court to halt any remaining payments to the FTX Europe leadership, as they believe FTX Europe lacks value as an asset.
In April, a Swiss court approved FTX’s request to explore the sale of FTX Europe. Meanwhile, FTX Europe has started allowing customers to withdraw funds locked up.
Hot Take:
The legal battle between FTX and FTX Europe leadership highlights the potential financial mismanagement and lack of value in the acquisition. FTX’s lawyers are seeking to recover a significant amount of money, indicating potential wrongdoing. This case underscores the importance of due diligence and proper evaluation in business acquisitions.
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