Caroline Ellison, the former CEO of Alameda Research, has agreed to hand over most of her assets to settle a lawsuit filed by FTX’s bankruptcy estate.
The announcement was made in a Monday filing as part of the ongoing efforts to recover funds for creditors who were affected when the company collapsed in late 2022.
As part of the settlement, Ellison will hand over about $22.5 million in bonus payments given to her in February 2022, as well as $6.3 million transferred to her in July and September 2021.
According to court documents, “Following the settlement, Ellison will have no remaining assets other than certain physical personal property.”
Additionally, Ellison has agreed to cooperate fully with the bankruptcy estate in ongoing and future investigations, which could help recover more money for creditors.
FTX argued that the settlement is as beneficial as continuing to pursue Ellison in an adjacent court case because it gives “substantially all that they could recover” anyway, and her additional cooperation provides significant value. They noted that pursuing litigation would deplete Ellison’s remaining resources and cost time and money.
The goal is to recover as many assets as possible. On Monday, Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware approved FTX’s reorganization plan. According to the filing, about 94% of creditors in the “dotcom customer entitlement claims” class, representing around $6.83 billion in claims, voted in favor of this plan.
On Sept. 25, Ellison received a two-year sentence in prison for her role in misusing customer funds. However, she now plays a key witness in the case against Sam Bankman-Fried, the founder of FTX, who was also sentenced to 25 years in prison in March.
