{"id":60703,"date":"2023-10-03T15:59:16","date_gmt":"2023-10-03T19:59:16","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=60703"},"modified":"2023-10-03T15:59:55","modified_gmt":"2023-10-03T19:59:55","slug":"sam-bankman-fried-sues-insurer-for-defense-fees-as-trial-begins","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/sam-bankman-fried-sues-insurer-for-defense-fees-as-trial-begins\/","title":{"rendered":"Sam Bankman-Fried Sues Insurer for Defense Fees as Trial Begins"},"content":{"rendered":"\n

SBF has coverage for directors and officers through FTX Trading<\/a>‘s parent company, Paper Bird, but now that two companies have paid out $10 million, the third in line is refusing to pay, according to the lawsuit.<\/p>\n\n\n\n

\"Sam<\/figure>\n\n\n\n

As the final preparations for Sam Bankman-Fried's trial were being made in Manhattan, his counsel filed a lawsuit against the Continental Casualty insurance company in the District Court of Northern California.<\/p>\n\n\n\n

This corporation allegedly provides directors and officers (D&O) insurance to Paper Bird and its subsidiary FTX Trading. Bankman-Fried, as an individual, submitted the lawsuit.<\/p>\n\n\n\n

The lawsuit asserts that Continental Casualty provides Paper Bird's “second-layer excess policy in the D&O insurance tower.”<\/p>\n\n\n\n

D&O insurance protects the directors and officers of a company against personal financial loss if they are sued.<\/p>\n\n\n\n

Such coverage can be organized into a symbolic tower of policies, where a policy on a given stratum takes effect when the policy beneath it reaches its limit.<\/p>\n\n\n\n

According to the lawsuit, the principal layer of D&O \r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>coverage for Bankman-Fried's defense provided $10 million from two insurers, and Continental Casualty's policy was intended to provide $5 million.<\/p>\n\n\n\n

The policy required that payments be made on an ongoing basis.<\/p>\n\n\n\n

It covered the cost of defending against criminal charges despite an exclusion for “fraudulent, criminal, and similar acts.”<\/p>\n\n\n\n

The policy did not include a clawback clause.<\/p>\n\n\n\n

Beazley and QBE, the two primary D&O policy providers for Paper Bird, paid his defense costs under the policy's provisions, as stated in the lawsuit.<\/p>\n\n\n\n

Bankman-Fried requests that Continental Casualty pay his contractually obligated defense costs, as well as damages and court costs, per the terms of their agreement.<\/p>\n\n\n\n

\"\"
Sam Bankman-Fried's complaint against Continental Casualty. Source: CourtListener<\/em><\/figcaption><\/figure>\n\n\n\n

Hiscox Syndicates' provision of the third stratum of the D&O tower for Paper Bird is also the subject of legal action.<\/p>\n\n\n\n

Hiscox has filed a Complaint for Interpleader against Paper Bird and an extensive list of insured parties, which includes Bankman-Fried.<\/p>\n\n\n\n

An interpleader action compels the parties to litigate their claims in a legal proceeding.<\/p>\n\n\n\n

According to this complaint, filed on August 9 in the District Court for Northern California, the Hiscox policy takes effect after the $15 million in underlying coverage.<\/p>\n\n\n\n

The complaint stated that Hiscox anticipated claims for $5 million in coverage under its policy, and interpleading was required to assure equitable distribution of policy funds.<\/p>\n\n\n\n

In the Hiscox complaint, twenty individuals were named.<\/p>\n\n\n\n

They were all described as having connections to FTX, sometimes by job title (head of a department).<\/p>\n\n\n\n

According to The Financial Times, Paper Bird owned 89% of FTX Trading and was the sole proprietor of FTX Ventures.<\/p>\n\n\n\n

The news source referred to FTX Trading as “the foundation company identified in FTX's legal disclaimers.” Bankman-Fried owned Paper Bird in its entirety.<\/p>\n\n\n\n

Bankman-Fried sought to collect D&O insurance payments under a policy issued to West Realm Shires, more commonly known as FTX US.<\/p>\n\n\n\n

This effort was opposed by FTX attorneys<\/a> and the creditors' committee, and the U.S. District Court blocked it for the District of Delaware.<\/p>\n","protected":false},"excerpt":{"rendered":"

SBF has coverage for directors and officers through FTX Trading‘s parent company, Paper Bird, but now that two companies have paid out $10 million, the third in line is refusing to pay, according to the lawsuit. As the final preparations for Sam Bankman-Fried’s trial were being made in Manhattan, his counsel filed a lawsuit against […]<\/p>\n","protected":false},"author":56,"featured_media":58901,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[16584,1135,778,1667,1502,11872],"class_list":["post-60703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-trial","tag-fraud","tag-ftx","tag-insurance","tag-regulation","tag-sam-bankman-fried-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jeremy-hogan-sec-appeal1.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/60703","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/56"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=60703"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/60703\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/58901"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=60703"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=60703"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=60703"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}