FTX Founder Bankman-Fried Drops Extra D&O Protection Spat With CNA Unit

A number of days after he was discovered responsible of one of many largest monetary frauds on document, FTX founder Sam Bankman-Fried dropped an insurance coverage protection lawsuit towards extra insurance coverage firm Continental Casualty Co.

Shortly earlier than his trial started in early October, Bankman-Fried filed the go well with in U.S. District Courtroom for the Northern District of California towards the unit of CNA, claiming that it had improperly refused to offer authorized prices allegedly lined by a administrators and officers coverage.

Associated: As Trial Opens, FTX’s Bankman-Fried Battles Excess Insurer Over D&O Coverage

On Nov. 6 a nondescript, one-line court docket submitting served as discover of dismissal of the go well with, with prejudice – that means Bankman-Fried can’t file the identical declare with the court docket. Bankman-Fried was discovered responsible Nov. 2 of defrauding traders out of billions of {dollars} by means of his FTX cryptocurrency alternate, which went bankrupt in 2022.

Equally, Daniel Friedberg, who stated he held varied government roles at FTX entities, individually filed a discover of dismissal. Friedberg earlier filed a movement to intervene within the go well with as a result of he claimed to have acquired not one of the $20 million in protection from the D&O protection tower.

Associated: Ex-Crypto Mogul Sam Bankman-Fried Convicted of Multi-Billion Dollar FTX Fraud

The Continental Casualty coverage is a second-layer extra coverage within the D&O insurance coverage tower in impact from August 4, 2022, till August 4, 2023, offering a $5 million restrict of legal responsibility, which attaches upon exhaustion of the $10 million in combination limits of the underlying insurance coverage. The $10 million in underlying protection was offered by Beazley and QBE Insurance coverage – $5 million of major protection and $5 million of first-layer extra, respectively. Hiscox offered the final layer of $5 million and had deposited it with the court docket.

In response to court docket filings, the CNA subsidiary had paid out practically $900,000 however then stopped sending funds. The explanation for this stays unknown. Kevin M. LaCroix, government vp at RT ProExec, a division of RT Specialty, in a recent D&O Diary blog post stated the protection dispute raised some fascinating questions associated to the distribution of D&O protection to a number of insureds.

Matters
Excess Surplus
Directors Officers