Raines Feldman partner Kathy Bazoian Phelps was quoted in the Washington Examiner on politicians pressure to return millions of dollars of donations received by FTX founder Sam Bankman-Fried after the company’s spectacular collapse.
In the article, Kathy noted that those reluctant to give back the funds may be forced to do so by a court.
“There is a legal basis potentially to seek the return of those monies that were transferred under both the bankruptcy code and state statutes, what are called fraudulent transfer laws,” she told the Washington Examiner. “There are defenses that can be asserted, there are certain exemptions, so there is a chance that a lot of those issues will get played out in court, but those transfers will certainly be examined.”
Kathy, who wrote The Ponzi Book: A Legal Resource for Unraveling Ponzi Schemes, said that if there is a concerted attempt to recoup the FTX funds, it is unclear how much will ultimately be returned, given the variability of success. She said that returns in past cases have ranged from 0% to 100%, although she said that more often than not the number is under 50%.
“The size and scope of it makes it stand apart. Both in terms of the amount of dollars involved and in terms of the number of people implicated,” Phelps said.
Read the complete article here.