FTX Group advisers have scrutinized whether or not they can claw again tens of millions of {dollars} paid to Shaquille O’Neal, tennis star Naomi Osaka and different skilled athletes and groups that promoted Sam Bankman-Fried’s crypto platform earlier than its collapse.
Monetary advisers employed by FTX disclosed in court docket papers that they’ve analyzed if sure funds dished out to athletes earlier than the corporate unraveled final November will be recovered in Chapter 11. Advisers have reviewed funds to O’Neal, Osaka and others to find out if the transfers are topic to guidelines that let firms to reverse transactions that occurred simply earlier than a Chapter 11 submitting, in accordance with court docket paperwork. Sam Bankman-Fried leaves court docket in New York on July 26.
Whereas not an entire accounting of FTX’s spending on endorsements, the brand new disclosures seemingly provide the fullest glimpse to this point into how Bankman-Fried’s empire elevated its profile utilizing the celebrity of superstar athletes, Main League Baseball, Nationwide Basketball Affiliation groups and Components 1. Whether or not FTX advisers imagine all the funds will be recovered, or if any athletes or groups have already provided to return funds, couldn’t be discovered. FTX’s disclosures describe most of the transfers to athletes, groups and leagues as prepayments associated to promoting or sponsorship offers.
FTX cautioned the monetary disclosures will not be accomplished as a result of the corporate lacked “detailed historic amortization info” and could possibly be additional amended sooner or later. New FTX Chief Government Officer John J. Ray III stated when the corporate filed Chapter 11, the corporate lacked reliable monetary info and didn’t hold full books and information.
It’s additionally attainable that athletes, groups or different events both withdrew or offset deposits earlier than FTX filed chapter, the corporate stated. FTX in December stated various events that had been paid by the agency had tried to return funds for the advantage of clients and different collectors. FTX stated prepayments and deposits it in the end recovers could differ from quantities the corporate reported.
The crypto platform disclosed roughly $4.9 million disbursed to MLB, which for a time required umpires to put on patches bearing FTX’s emblem, and no less than $12.2 million associated to partnership agreements with Components 1 racing staff Mercedes-AMG Petronas. The platform disclosed $3.4 million in funds to the NBA’s Golden State Warriors and almost $242,000 in funds to star participant Stephen Curry’s enterprise, SC30 Inc. An FTX spokesman and a lawyer for Mercedes-Benz Grand Prix Ltd. declined to remark. Attorneys representing O’Neal, Osaka, Curry, the Golden State Warriors, and MLB didn’t reply to requests for remark.
FTX stated no less than a portion of the Components 1-related funds may probably be reversed in Chapter 11 and FTX’s monetary adviser, Alvarez & Marsal, has analyzed whether or not funds to the Golden State Warriors is also undone, in accordance with the agency’s billing information. Funds to the Warriors embody $2 million transferred to the staff a couple of month earlier than FTX filed chapter, in accordance with court docket paperwork. Mercedes introduced it could droop its relationship with FTX shortly earlier than the agency filed chapter.
The disclosures come after FTX’s new administration sued a enterprise capital agency that allegedly related Bankman-Fried to NBA stars and different celebrities. Athletes and groups that promoted FTX together with O’Neal, Osaka and the Warriors have denied wrongdoing in lawsuits blaming them for investor losses. Signage outdoors the FTX Enviornment in Miami, Florida, in 2022.
FTX affiliate West Realm Shires Companies Inc. stated it paid $2.5 million in August 2022 to a subsidiary of Genuine Manufacturers Group affiliated with O’Neal. The identical FTX affiliate stated it paid Osaka $2 million on Nov. 9, 2022, two days earlier than Bankman-Fried resigned as CEO and his firm filed chapter. The funds are amongst some $4.3 million in funds FTX attributes to O’Neal and his ABG enterprise and roughly $3.2 million the corporate stated it paid to Osaka associated to FTX partnership and endorsement offers, in accordance with court docket paperwork.
Different athletes named in FTX’s disclosures embody Jacksonville Jaguars quarterback Trevor Lawrence, who FTX stated obtained a $500,000 cost in September 2022. FTX additionally disclosed roughly $600,000 in funds to retired Boston Crimson Sox slugger David Ortiz and his charity that funds coronary heart surgical procedures for youngsters within the Dominican Republic and New England.
Additionally disclosed have been roughly $1.2 million in funds to the NBA’s Washington Wizards and staff proprietor Monumental Sports activities and Leisure in addition to about $484,000 paid to the Miami Warmth. These quantities embody funds from an FTX affiliate to Monumental and the Warmth for $969,000 and $400,333, respectively, a couple of month earlier than the crypto agency filed Chapter 11. Attorneys for Lawrence and Ortiz didn’t return messages looking for remark. Alvarez & Marsal, the Miami Warmth, Monumental and Genuine Manufacturers Group additionally didn’t reply to messages looking for remark.
