Former Alameda CEO Caroline Ellison agrees to hand over bulk of her assets to settle FTX lawsuit

Caroline Ellison, the former co-CEO of Alameda Research, has agreed to turn over the bulk of her assets to FTX debtors in an effort to settle a lawsuit filed against her by the FTX bankruptcy estate.

In a Monday filing, FTX Trading Ltd. wrote that Ellison agreed to a settlement involving transferring “substantially all of her assets” not otherwise forfeited to the government — or used to pay legal fees — to the debtors. Ellison also agreed to “cooperate extensively” with the FTX bankruptcy estate in ongoing and prospective investigations.

FTX filed for bankruptcy in late 2022, and the debtors sued Sam Bankman-Fried, Ellison and several other former executives in the hope of recovering as many assets as possible. The Monday filing reiterated that the litigation aimed to recover about $22.5 million in bonus payments transferred to Ellison in February 2022, as well as $6.3 million transferred to her in July and September 2021.

“Following the settlement, Ellison will have no remaining assets other than certain physical personal property,” FTX said in the filing.

On Monday, Judge John Dorsey in the U.S. Bankruptcy Court for the District of Delaware approved FTX’s reorganization plan during a hearing. About 94% of creditors in the “dotcom customer entitlement claims” class who returned their ballots — representing about $6.83 billion in claims by value — voted in favor of the reorganization plan.

Last month, Ellison was sentenced to two years for her role in the collapse of FTX which caused users to lose billions of dollars. Sam Bankman-Fried, founder of FTX, was sentenced to nearly 25 years in prison in March and ordered to pay back up to $11 billion in investor and lender losses.

Ellison is said to have been cooperative in facilitating investigations into FTX. In a September filing prior to Ellison’s sentencing, John John J. Ray III, CEO of the FTX bankruptcy estate, said that Ellison has “provided the Debtors with valuable assistance and cooperation, which resulted in the recovery of hundreds of millions of dollars in Debtor assets for the benefit of creditors.”