Former FTX CEO to be Insured Up to His Neck with $10M Fund

Former FTX CEO Justin Sun is asking a bankruptcy court to create an insurance fund worth $10 million to cover his legal expenses while pursuing a lawsuit against the company and its creditors.

According to Sun, the insurance fund would provide him with the necessary resources to protect his rights while also protecting FTX’s creditors and current shareholders.

FTX Debtors and Unsecured Creditors Not Having Any of It

Unfortunately for Sun, FTX’s debtors and unsecured creditors are having none of it. Sun’s move to have a $10 million defense fund is being met with opposition from the debtors, who fear Sun will use the fund to advance his own interests at their expense.

Scope of the Fund Is Unclear

It’s not yet clear what the scope of the insurance fund would be, but some lawyers suggest Sun could use the fund to cover the costs of retaining a private attorney or hiring a team of experts.

It’s also possible that if Sun is successful in obtaining the fund, FTX could end up footing the bill through its insurance policy or other assets.

Will Sun Win?

It’s hard to tell at this point if Sun will be able to get the fund. While Sun has the power to propose such a fund and make his case for it in the court, it’s up to the judge to decide if this would be beneficial for everyone involved and if it would be in line with the objectives of the bankruptcy process.

It looks like we’ll have to wait and see how this one plays out. Does anyone else smell legal drama in the air?