FTX Advisors Examine Restoration of Pre-Collapse Funds to Shaq, Naomi Osaka, and Extra

FTX Group advisers are investigating the potential of reclaiming thousands and thousands of {dollars} paid to celebrities, together with Shaquille O’Neal and Naomi Osaka, for his or her endorsements of Sam Bankman-Fried‘s cryptocurrency platform earlier than its collapse.

The monetary advisers employed by FTX have examined the funds made to those athletes to find out if they are often recovered underneath the principles that permit firms to reverse transactions executed simply earlier than submitting for Chapter 11 chapter, Bloomberg reported, citing court docket paperwork.

Whereas these disclosures don’t present a complete overview of FTX’s endorsement spending, they make clear how Bankman-Fried’s empire leveraged the celebrity of celeb athletes, Main League Baseball (MLB), Nationwide Basketball Affiliation (NBA) groups, and Method 1 to reinforce its model visibility.

The extent to which FTX advisers consider the funds could be recovered, in addition to whether or not any athletes or groups have already supplied to return the funds, stays unknown. 

FTX’s disclosures describe most of the transfers to athletes, groups, and leagues as prepayments related to promoting or sponsorship agreements.

Nonetheless, the change has cautioned that the monetary disclosures might not be complete on account of a scarcity of detailed record-keeping.

The corporate’s new CEO, John J. Ray III, has admitted that FTX lacked dependable monetary info on the time of submitting for Chapter 11 and didn’t preserve full monetary information.

FTX additionally acknowledged the chance that athletes, groups, or different events might have withdrawn or offset deposits earlier than the chapter submitting. 

FTX Paid Tens of millions to Skilled Athletes and Groups

In keeping with FTX’s disclosures, roughly $4.9 million was paid to MLB, which mandated umpires to put on FTX emblem patches for a sure interval. 

The corporate additionally revealed at the least $12.2 million associated to partnership agreements with the Method 1 racing group Mercedes-AMG Petronas. 

Moreover, FTX disclosed $3.4 million in funds to the NBA’s Golden State Warriors and almost $242,000 in funds to Stephen Curry’s enterprise, SC30 Inc.

FTX has indicated {that a} portion of the Method 1-related funds and funds to the Golden State Warriors might probably be reversed underneath Chapter 11. 

Alvarez & Marsal, FTX’s monetary adviser, has reportedly analyzed the potential of undoing funds to the Warriors, together with a $2 million switch made roughly a month earlier than FTX filed for chapter. 

Final yr, FTX affiliate West Realm Shires Companies Inc. revealed that it paid $2.5 million to an Genuine Manufacturers Group subsidiary related to O’Neal.

The identical affiliate acknowledged that it paid Osaka $2 million on November 9, 2022, simply two days previous to Bankman-Fried’s resignation and the following chapter submitting.

FTX attributed roughly $4.3 million in funds to O’Neal and his ABG enterprise and roughly $3.2 million to Osaka for FTX partnership and endorsement offers.

Different athletes talked about in FTX’s disclosures embrace Trevor Lawrence, the quarterback for the Jacksonville Jaguars, who allegedly acquired a $500,000 cost in September 2022. 

FTX additionally disclosed funds of round $600,000 to retired Boston Purple Sox participant David Ortiz and his charity, which helps youngsters’s coronary heart surgical procedures within the Dominican Republic and New England.

These disclosures comply with FTX’s authorized motion towards Kives and his enterprise capital agency, K5, to get well the estimated $700 million Bankman-Fried had invested in it. 

The criticism claims that Bankman-Fried was a “profligate patron” who despatched thousands and thousands to Kives, K5 World, and Baum after he attended a social occasion hosted by Kives in 2022.

FTX has sought the return of funds transferred from Alameda Analysis that ended up in SGN Albany Capital and funds transferred from Kives, Baum, and SGN Albany Capital to Mount Olympus Capital.