FTX founder and former CEO Sam Bankman-Fried is desperately searching for investors to offer a cash injection to his now-bankrupt company.
The former CEO has faced criticism for lying and saying that FTX was “fine” just before the shit hit the fan, and it became apparent that the company was not, in fact, fine.
FTX has a new CEO and has filed chapter 11, but SBF is not giving up.
SBF wants to use the funds he could potentially collect to repay individual traders and institutional clients.
Companies under bankruptcy protection do sometimes receive loans meant to help upkeep operations. Debtor-in-possession financing implies that if the company survives, the first funds they earn from a cash injection will pay down that desperately needed lifeline. However, it is less common for a company to raise fresh equity capital early in the bankruptcy process (you know, like FTX) since debtholders hold priority over any remaining assets.
It could be a clever move for SBF to keep goodwill among investors for any future endeavors – or just another blunder from someone people are starting to suspect may be winging it every step of the way.