FTX’s Creditors Push Back on Bankman-Fried’s Bid for D&O Insurance

Unsecured creditors of FTX Trading Ltd. are opposing founder Sam Bankman-Fried’s bid to tap the bankrupt crypto exchange’s directors and officers insurance policies to pay for his legal costs.

The insurance policies are meant to protect company leaders when “they make honest decisions in the ordinary course of the business,” the creditors’ committee said in a filing Wednesday.

But Bankman-Fried is seeking an insurance payout “to fund Defense Costs incurred by the alleged perpetrator of one of the largest criminal frauds in the last decade,” the committee said.

Insurance proceeds are property of the estate and protected by bankruptcy law, ...