The parents of FTX founder Sam Bankman-Fried are attempting to have a lawsuit filed against them by the exchange, claiming they were not involved in fraudulent transfers or breaches of fiduciary duty.
in filing monday date, Attorneys Joseph Bankman and Barbara Fried said the plaintiffs, including the debtors at FTX and Alameda Research, sought to “take advantage of the sheer fact that the defendants’ sons were founders and officers of the debtor companies.”
“That relationship is not litigable,” Bankman and Fried’s attorney said. “Although Plaintiffs allege that Defendants interacted with the Debtor Organization in a limited capacity, Defendants never performed any administrative role of any kind.”
Monday’s document supporting the motion to dismiss the lawsuit came after FTX. Complaints filed in September 2023 Against Bankman-Fried’s parents. Covers damages resulting from fraudulent transfers, breach of fiduciary duty, and other misconduct.
“Bankman-Fried’s parents, Bankman and Fried, used their access and influence within the FTX Corporation to directly and indirectly make millions of dollars at the expense of the debtors and their creditors in Chapter 11 cases.” The plaintiff said in the September filing:
Family business?
The plaintiffs alleged that Bankman described Alameda as a “family business” and financed it with cash provided by the debtor to purchase a $16.4 million luxury property in the Bahamas called “Blue Water” or “Old Fort Bay.”
Bankman and Fried denied the claims, saying that Bankman’s family ties and communications with Bankman-Fried “do not make Mr. Bankman a de facto director of Alameda or FTX US.”
Attorneys said the lawsuit does not allege that the parents used Bluewater as their primary or exclusive residence. “The Debtors are well aware that many of FTX Group’s operations and business assets at the time involved in the Blue Water transaction were located in the Bahamas and that FTX employees lived and worked there.”
The lawsuit also argued as follows: Bankman and Fried have driven tens of millions of dollars in political and philanthropic donations, including to Stanford University. This “seemed designed to elevate Bankman and Fried’s professional and social status at the expense of the FTX Group.”
The parents’ attorneys argued that the claims are “without legal significance” because neither Bankman nor Fried allegedly received funds donated to Stanford or received “an undefined benefit” as a result of their donations.
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