Sam Bankman-Fried's Parents Request the Dismissal of the FTX Clawback Lawsuit

According to Joseph Bankman and Barbara Fried, the lawsuit is attempting to take advantage of the fact that they are the parents of the former CEO of FTX.

In an effort to dismiss the lawsuit filed by FTX, the parents of former FTX CEO Sam Bankman-Fried deny any knowledge of the issues at the crypto exchange and refute allegations of knowingly benefiting from misconduct at the company.

In a court filing on January 15, attorneys representing Joseph Bankman and Barbara Fried contested that FTX's lawsuit aimed to take advantage of the simple fact that they were the parents of the previous FTX CEO.

The lawsuit filed by FTX in September claimed that Bankman and Fried utilized their access and influence within the FTX empire to benefit themselves, while disregarding the well-being of the debtors in the FTX bankruptcy estate.

However, Bankman and Fried have refuted the allegations, stating that a significant portion of the claims were predicated on their familial relationship with their son.

“That relationship is not actionable,” argued attorneys from Montgomery McCracken Walker & Rhoads.

The attorneys have dismissed the assertion that Bankman had a fiduciary relationship with FTX and acted as a de facto director. Furthermore, they argue that even if a fiduciary relationship did exist, the plaintiffs have not presented a plausible case of breach.

“Mere conclusory allegations are insufficient to state a plausible claim for relief. The complaint must contain sufficient facts allowing the court to draw the reasonable inference that the defendant is liable for the misconduct alleged,” they argued.

Similar arguments were made for Barbara Fried, the mother of Sam Bankman-Fried. It was argued that there was a lack of allegations regarding an underlying breach and any actual knowledge of misconduct.

“The claims against Mr. Bankman and Ms. Fried should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6) and Federal Rule of Bankruptcy Procedure 7012(b) for failure to state a claim.”

FTX has been making efforts for several months to recover millions of dollars in cash and gifts from Bankman and Fried, which includes a $16.4 million villa located in the Bahamas.

The lawyers representing Bankman and Fried contended that both the $10 million cash gift and the Bahamas 'Blue Water' property did not demonstrate any self-interest, as the property was utilized by FTX employees as a business location.

Additionally, the $10 million transfer was a gift given from Sam Bankman-Fried's personal account, during a time when the company was valued at billions of dollars.

“This negates any conclusory assertion that the gift could plausibly be attributed to “self-interest” on the part of Mr. Bankman,” they argued.

The crypto exchange filed a complaint against Bankman-Fried's parents, accusing them of breaching their fiduciary duties and engaging in fraudulent transfers.