FTX Co-founder Faces Legal Challenge over Unpaid Salary Bonus Claims Amid Bankruptcy Proceedings
Summary:
FTX co-founder Sam Bankman-Fried faces legal issues as Ross Rheingans-Yoo, an employee of the company's charity wing, demands the balance of his 2022 salary bonus of $275,000. Rheingans-Yoo asserts that only $375,000 of his $650,000 bonus was paid before the crypto exchange declared bankruptcy. He also claims he is due an additional $650,000 for charity, a pre-bankruptcy salary pay of around $5,700, and a post-petition salary of at least $62,800. Rheingans-Yoo's claims are being contested by FTX, and the case is to be settled by a Delaware bankruptcy judge.
Sam Bankman-Fried, co-founder of FTX, finds himself in hot water as an employee from the exchange's charity branch is demanding the balance of his 2022 salary bonus, amounting to $275,000. Ross Rheingans-Yoo's lawyers stated in a November 13 court document that FTX disbursed only $375,000 of his $650,000 bonus prior to filing for bankruptcy in November 2022.
This assertion forms part of Rheingans-Yoo's latest court filing, a direct response to an objection from FTX filed on October 30. Rheingans-Yoo presented a Google Doc, initiated by Bankman-Fried, which elucidated the terms of his role at the FTX Foundation. This role offered a basic salary of $100,000. He cited a memo from Bankman-Fried to support his claim, clarifying that he was not a member of Bankman-Fried’s close confidants and was oblivious to FTX's misuse of customer funds. His lawyers characterized Rheingans-Yoo as a loyal employee caught up in a debacle of someone else's making.
Indeed, Rheingans-Yoo alleges he is due an additional $650,000, earmarked for charity, a pre-bankruptcy salary payout of approximately $5,700, and a post-bankruptcy salary of a minimum of $62,800. On the contrary, advisers contend that FTX has compensated Rheingans-Yoo in full for his bonus because he chose to accept part of the award through options in the firm’s associated companies before it declared bankruptcy, a claim Rheingans-Yoo disputes.
A Delaware bankruptcy judge presiding over FTX’s Chapter 11 bankruptcy will determine the resolution of Rheingans-Yoo’s bonus claim. Furthermore, FTX filed a lawsuit against Rheingans-Yoo’s Latona Biosciences Group, Bankman-Fried and a handful of other defendants in July, seeking the return of $71.6 million in alleged investments and donations made to a series of life science entities.
FTX argues that Rheingans-Yoo and Bankman-Fried derived personal gain from these investments and donations, yet FTX and Alameda Research did not. Rheingans-Yoo purports that his work for Latona, which encompassed vetting potential recipients, communicating with their founders and executives, and executing due diligence, would have brought about favourable societal outcomes. The future trust in crypto exchanges following FTX's collapse remains the subject of debate.
Published At
11/14/2023 2:36:16 AM
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