The parents of Sam Bankman-Fried, the disgraced founder of FTX, are seeking to have the lawsuit filed against them dismissed. They are arguing that they had no involvement in any alleged fraudulent transfers or breaches of fiduciary duties.
Lawyers representing Joseph Bankman and Barbara Fried filed a motion on Monday, stating that the plaintiffs, who are debtors of FTX and Alameda Research, are attempting to exploit the fact that Bankman-Fried is their son.
The attorneys representing Bankman and Fried emphasized that their relationship with the debtor entities is not grounds for legal action.
They pointed out that neither defendant held any executive roles and had only limited interactions with the Debtor entities.
The lawsuit was initially filed by FTX in September 2023, seeking to recover damages caused by alleged fraudulent transfers, breaches of fiduciary duties, and other misconduct.
According to the plaintiffs, Bankman and Fried used their access and influence within the FTX enterprise to enrich themselves at the expense of the debtors.
They claimed that Bankman described Alameda as a “family business” and used funds provided by the debtors to purchase a luxury property in The Bahamas known as “Blue Water” or “Old Fort Bay” worth $16.4 million.
Bankman and Fried have vehemently denied these allegations.
They argued that Bankman’s familial relationship and communications with Bankman-Fried did not make Bankman a de facto director of Alameda or FTX US.
The attorneys emphasized that the lawsuit failed to establish that Blue Water was their primary or exclusive residence and pointed out that many FTX Group operations and business properties were located in the Bahamas at the relevant time.
The lawsuit also claimed that
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