Sam Bankman-Fried (SBF) filed a court document on March 15 attempting to utilize FTX’s insurance coverage to pay for his legal costs.
The directors and officers (D&O) insurance policies held with Relm Insurance and Beazley Insurance were demanded by the legal counsel for the former FTX CEO in a motion to allow insurers to advance or repay his defense costs and fees. According to the petition, the policies provide “individual insureds with un-indemnified losses like SBF priority of payment.” In other words, the former CEO would receive the highest FTX compensation.
The document stated, in part: “Relm and Beazley to (a) reimburse Mr. Bankman-Fried for covered Defense Costs that have already been incurred under the D&O Policies, and (b) advance future covered Defense Costs unless and until the Defense Costs no longer qualify as Non-Indemnifiable Losses under the terms of the D&O.”
In order to protect individuals from personal losses if they are sued as a result of serving as a director or an officer of a business or other type of organization, directors, and officers liability insurance, according to Investopedia, also covers legal fees and other costs associated with a lawsuit.
Responses or objections to the motion must be submitted by March 29, 2023. On April 12, 2023, at the United States Bankruptcy Court for the District of Delaware, a hearing will be placed if necessary. Bankman-Fried requests that the court grants the relief request without further notice if no replies or objections are made.
SBF legal actions
SBF Attorney stated that the former CEO is the subject of “several criminal, regulatory, insolvency-related and civil activities,” including seven legal actions, three federal and state regulatory proceedings, five insolvency-related hearings, and one criminal prosecution.
SBF now faces a total of 12 criminal charges, including four counts each of wire fraud and securities fraud, as well as four new criminal counts brought against him by the federal judge overseeing his case on February 23. His legal expenses are anticipated to be in the nine figures range.