Emergent Fidelity Technologies, the offshore entity that holds 55 million shares of Robinhood Markets Inc HOOD, filed for bankruptcy on Friday, as multiple parties try to claim ownership of the stock, Bloomberg reported.
The value of the Robinhood shares is estimated to be over $590 million at current market prices and has been seized by the U.S. government.
The Chapter 11 bankruptcy filing gives Emergent Fidelity and its liquidators, appointed by a court in Antigua, the power to defend their assets and creditors' interests in the U.S.
"Given the many parties claiming to be creditors or outright owners of the debtor's assets in proceedings in the U.S., the liquidators believe that Chapter 11 protection is the only practical way to empower the debtor to defend itself, the assets, and its creditors' interests in the U.S.," said Angela Barkhouse, one of the liquidators appointed by the court in Antigua.
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Emergent Fidelity, which is 90% owned by Sam Bankman-Fried, holds $20.7 million of cash but has no other assets.
The company's 10% shareholder is Gary Wang, co-founder of FTX Group.
Despite Bankman-Fried's majority ownership, he no longer controls the entity, as stated in court papers.
The bankruptcy filing of Emergent Fidelity Technologies is a result of the ongoing legal battle over who should possess the stock following the collapse of FTX Group.
The Chapter 11 protection gives the company time to navigate complex legal proceedings and ensures that the interests of the creditors and assets are protected.
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