FTX Creditors Lose $44B Battle To IRS In Bankruptcy Case

Key Points:

• The IRS is claiming $44 billion in taxes from FTX, Alameda Research, and its subsidiaries, which they classify as an administrative priority, superseding creditors’ claims.
• Sam Bankman-Fried’s lawyers are challenging the criminal charges as a civil issue and accused FTX’s lawyers of working as prosecutors in the case.
• Shaquille O’Neal allegedly avoids being served in a legal complaint against him, implicating him in FTX’s collapse. Other celebrities also became embroiled in the FTX case via promotions and endorsements.

The Internal Revenue Service (IRS) has made a claim of $44 billion in taxes relating to FTX, Alameda Research, and its subsidiaries.

This is a significant claim and has raised eyebrows in the financial world. The claim is categorized as an administrative priority, which means that the IRS’ claims take precedence over the funds owed to the exchange’s creditors. The IRS has filed a total of 45 claims against the exchange and its subsidiaries in the filings. The filings were published on April 27 and 28, and Alameda Research owes $20.4 billion in unpaid partnership taxes and federal payroll taxes.

The ongoing dispute over creditors’ dues is still determining the exact implications of this situation. Nick van Eck, a partner at General Catalyst, has expressed curiosity about the methodology used to calculate the amounts and the process for obtaining the funds.

Sam Bankman-Fried’s lawyers have been busy in the FTX saga. They have asked the judge to toss out criminal charges, saying that it was more of a civil issue. Additionally, his legal team has accused FTX’s lawyers from Sullivan & Cromwell of working as prosecutors in the case. The case has had a number of developments, and it remains to be seen how it will play out.

Deputy Assistant Secretary Sandra Lee of the Financial Stability Oversight Council (FSOC) has also stated that following the recommendations of a report could have avoided the FTX collapse. This is a significant statement, and it highlights the importance of having strong financial regulations to prevent such collapses from happening in the future.

In other aspects of the FTX case, there is controversy forming. Basketball legend and pundit Shaquille O’Neal has allegedly avoided being served in a legal complaint against him. His legal team claims that two servers inadequately served papers by tossing them in front of his car. Other celebrities and well-known figures, including Tom Brady, Steph Curry, Larry David, and Naomi Osaka, have also become embroiled in the FTX case via promotions and endorsements. The fallout from the FTX collapse continues, and it remains to be seen what the long-term consequences will be.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Annie

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