In a significant move to streamline its bankruptcy proceedings, FTX has agreed to pay Emergent Technologies $14 million to settle a dispute over $600 million worth of Robinhood shares. This settlement will cover Emergent’s administrative expenses and, in return, the firm will withdraw its claim on 55 million Robinhood shares and related cash.
The deal, outlined in a September 6 motion by FTX CEO John Ray III, was filed in Delaware Bankruptcy Court. The agreement is seen as a critical step for FTX in its restructuring efforts aimed at maximizing value for its creditors.
Settlement Paves the Way for Emergent’s Bankruptcy Resolution
As part of the settlement, Emergent Technologies, co-founded by Sam Bankman-Fried and former FTX executive Gary Wang, will expedite the resolution of its bankruptcy case in Antigua. This agreement allows FTX to avoid costly litigation and recover more funds for its creditors. FTX stated that the negotiations were conducted in “good faith” and free from any form of collusion.
Background: Ownership Dispute Over Robinhood Shares
Emergent initially acquired about 56 million Robinhood shares, worth approximately $600 million, in May 2022 through a deal with Bankman-Fried and Alameda Research. Following the collapse of FTX in November 2022, multiple parties, including FTX, BlockFi, and Bankman-Fried himself, laid claim to the shares. The U.S. Department of Justice seized the shares in January 2023, and Robinhood repurchased them on September 1, 2023, for around $606 million.
FTX’s Path Forward and Upcoming Hearing
The agreement with Emergent represents a step toward finalizing FTX’s bankruptcy reorganization. According to John Ray III, this settlement reduces legal costs and accelerates FTX’s plan to recover funds for its creditors.
A court hearing on this motion is scheduled for October 22.
