Emergent Fidelity Technologies filed for Chapter 11 in the United States Bankruptcy Court for the District of Delaware in order to pursue a “kind of combined administration” between its case and that of FTX.
Emergent Fidelity Technologies, an Antigua and Barbuda-based holding company owned by Sam Bankman-Fried, has filed for bankruptcy.
According to court documents filed on February 3, Emergent Fidelity Technologies voluntarily filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware. Regarding the status of around 55 million Robinhood shares, the company was already the subject of a November lawsuit launched by crypto lending firm BlockFi.
The Robinhood shares, which were valued at more than $590 million at the time of publishing, have been a source of disagreement between BlockFi, FTX creditor Yonathan Ben Shimon, and Bankman-Fried. As part of the lawsuit against FTX and its officials, the Justice Department said on January 6 that it had confiscated the shares and around $20 million in cash.
Emergent Fidelity Technologies asserted ownership of the shares and the $20 million as its “only known assets,” which were previously held by the brokerage firm Marex Capital Markets prior to their seizure by the DOJ. Angela Barkhouse, one of the Combined Provisional Liquidators in the case, stated in a declaration that Emergent Fidelity Technologies filed for Chapter 11 in the same court as FTX in order to pursue a “kind of joint administration” between the two bankruptcies.
Barkhouse stated, “The [Joint Provisional Liquidators’] duty are to the Debtor’s creditors, whoever they may be.” “Given the numerous parties claiming to be creditors or outright owners of the [Robinhood shares] in proceedings in the United States, the JPLs believe that chapter 11 protection is the only practical way for the Debtor to defend itself, the Assets, and its creditors’ interests in the United States.”
Barkhouse states that Bankman-Fried owns 90% of the company and Gary Wang, co-founder of FTX, controls the other 10%. The criminal prosecution of Bankman-Fried is expected to commence in October, whereas Wang has already pled guilty to fraud charges.
