Sam Bankman-Fried, former CEO of cryptocurrency exchange FTX, has filed a lawsuit against Continental Casualty, an insurance company, in the U.S. District Court for the Northern District of California.
The lawsuit alleges that Continental Casualty has failed to pay Bankman-Fried's defense costs and fees under directors and officers (D&O) insurance policies maintained with Paper Bird, the parent company of FTX Trading.
Bankman-Fried has asserted that Continental Casualty is the provider of Paper Bird's "second-tier excess policy in the D&O insurance tower."
D&O insurance protects a company's directors and officers from personal loss in the event of a lawsuit against them. The policy covers the cost of defense against criminal charges, although there is an exclusion for "fraudulent, criminal and similar acts."
The primary layer of D&O coverage provided $10 million for Bankman-Fried's defense by two insurers, and Continental Casualty's policy was intended to provide $5 million.
The policy required payments to be made on a current basis and had no recovery provision. Bankman-Fried requires Continental Casualty to pay its defense costs in accordance with its contractual obligation, along with damages, including court costs.
The lawsuit alleges that Continental Casualty has failed to pay Bankman-Fried's defense costs and fees under directors and officers (D&O) insurance policies maintained with Paper Bird, the parent company of FTX Trading.
Bankman-Fried has asserted that Continental Casualty is the provider of Paper Bird's "second-tier excess policy in the D&O insurance tower."
D&O insurance protects a company's directors and officers from personal loss in the event of a lawsuit against them. The policy covers the cost of defense against criminal charges, although there is an exclusion for "fraudulent, criminal and similar acts."
The primary layer of D&O coverage provided $10 million for Bankman-Fried's defense by two insurers, and Continental Casualty's policy was intended to provide $5 million.
The policy required payments to be made on a current basis and had no recovery provision. Bankman-Fried requires Continental Casualty to pay its defense costs in accordance with its contractual obligation, along with damages, including court costs.