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Former FTX executive Ryan Salame pleaded guilty Thursday in New York federal court to campaign finance and money-transmitting crimes, and agreed to forfeit more than $1.5 billion, CNBC.com reported. Salame, who was released on a $1 million bond, faces a maximum possible sentence of 10 years in prison. His sentencing was scheduled for March 6. In addition to the monetary forfeiture, which will be paid to the U.S. government, the 30-year-old Salame will pay $5 million to debtors of FTX. A source told CNBC that Salame is not cooperating with federal prosecutors, who are preparing for the criminal fraud trial of former FTX chief Sam Bankman-Fried.

A bitter feud between crypto tycoons has piqued the interest of U.S. investigators who were already looking into the finances of one of the industry’s best-known empires, Bloomberg News reported. For months, Digital Currency Group Inc. and its chief executive officer Barry Silbert have been facing fraud accusations from Cameron Winklevoss, the co-founder of crypto trading platform Gemini Trust Co. Despite them denying the claims, federal officials are digging in as part of an ongoing review of the internal financial dealings of DCG and its Genesis Global Capital subsidiary. Prosecutors in Brooklyn, Federal Bureau of Investigation agents, and U.S. Securities and Exchange Commission staff sat in on an interview in recent months with Winklevoss to discuss his allegations, according to people familiar with the matter. The U.S. Attorney’s Office for the Eastern District of New York inquired specifically about Silbert’s conduct, said the people, who asked not to be identified discussing the confidential probe. Silbert, who hasn’t been accused of any wrongdoing, referred an inquiry to a DCG spokeswoman. The representative for the company, which authorities also haven’t accused of misconduct, declined to comment. In the past, the company has said it operates in a lawful and ethical manner. Investigations by U.S. attorneys, the FBI or the SEC don’t always lead to charges or enforcement actions.

A bankruptcy filing may just be the tip of the iceberg for what's unfolding at Tempe-based Phat Rides Inc. The electric scooter company on Sept. 1 filed for chapter 11 bankruptcy protection. But Jeremy Hill, whose company is a key inside stakeholder in the business, is alleging that Tim Moran, the CEO who authorized the bankruptcy filing, had already been fired from Phat Rides after the company fell into default, the Phoenix Business Journal reported. Hill is the founder and managing partner at JB Capital, which helped Phat Rides refinance its debt after Moran took over as CEO in 2021. But that relationship has now turned sour, as JB Capital, based in Bellevue, Washington, has taken over controlling interest of the business, fired Moran and replaced the board, Hill told the Phoenix Business Journal. An injunction against workplace harassment was filed by Phat Rides against Moran on Aug. 25, according to Maricopa County records. The filing, submitted about a week before the bankruptcy, describes Moran as a "former employee" of Phat Rides. An accompanying certificate of service filed Aug. 28 states that Moran was "personally served true copies" of the injunction on Aug. 26 by a court certified process server. The injunction alleges that Moran was fired Aug. 4. Despite that, on Aug. 14 he allegedly "came to the business and was proclaiming that he was still the CEO and that he had only been on vacation."

Bankrupt cryptocurrency lender Genesis Global Holdco LLC sued its parent, Digital Currency Group, seeking to recover about $620 million in outstanding loans despite ongoing settlement talks, Bloomberg News reported. Genesis sued Barry Silbert’s DCG and DCG International Investments Ltd. on Wednesday in New York bankruptcy court but asserted that the companies will keep discussing a potential deal that could end the dispute. The lawsuits were filed after Genesis unveiled a $1.4 billion debt repayment plan backed by some of its customers but which isn’t supported by other key creditors. “Genesis has agreed to stay the turnover action so that we can move forward with documenting the deal in principle that was reached with Genesis, the UCC, and DCG,” a spokesperson for DCG said in an emailed statement. DCG will begin repaying the loans after a standstill agreement is filed with the bankruptcy court, the spokesperson said. The lawsuits concern loans to DCG that Genesis says matured in May. The outstanding debt includes a $500 million loan to DCG and loan to DCGI comprised of about 4,550 Bitcoin, according to the lawsuits. Genesis is also seeking to recover accrued interest and late fees. The complaint comes after months of court-ordered mediation involving Genesis, its key creditors and DCG. Gemini filed chapter 11 in January, following several other large crypto firms into bankruptcy.

Sam Bankman-Fried yesterday lost his bid to be freed immediately from a Brooklyn jail so he could prepare better for his criminal trial, less than a month away, over the collapse of his FTX cryptocurrency exchange, Reuters reported. In rejecting Bankman-Fried's request, the U.S. Court of Appeals for the Second Circuit in Manhattan nonetheless said that it would ask the next available three-judge panel to consider it. U.S. District Judge Lewis Kaplan on Aug. 11 revoked Bankman-Fried's $250 million bail after finding that the former billionaire likely tampered with witnesses at least twice. Bankman-Fried quickly appealed, arguing he would be unable to properly prepare for his scheduled Oct. 3 trial from behind bars. Prosecutors say Bankman-Fried stole billions in FTX customer funds to plug losses at Alameda Research, his hedge fund.

SEPTA may lose the $24 million it spent on structurally flawed Proterra electric battery buses now that the troubled manufacturer has filed for bankruptcy, the Philadelphia Inquirer reported. The 25 buses were pulled from Philadelphia’s streets in January 2020 after six months when SEPTA found cracks in their frames and other problems. One of the electric battery buses burst into flames late last year in a South Philly depot. The transit agency and Proterra had been negotiating over repairs that would get the EV buses back in service. Those talks have not produced a solution, and they were canceled abruptly after the Aug. 7 bankruptcy filing, SEPTA officials said. “At this point we don’t know what the path forward would be and what SEPTA’s [legal] remedies are, and we can’t say when the buses would come back into service,” said Andrew Busch, an agency spokesperson. The company says it intends to continue operating, seeking more capital or a buyer while holding creditors at bay. Some transit agencies say Proterra has told them buses they ordered will be delivered. SEPTA was an earlier purchaser of the company’s buses, and they were in use on several routes. Busch said there had been “progress” in talks over getting Proterra to fix the sidelined buses.

Four creditors on Thursday filed an involuntary bankruptcy petition against the owner of the shuttered South City Hospital in south St. Louis, the St. Louis Business Journal reported. The chapter 11 petition, seeking to put SA Hospital Acquisition Group LLC in bankruptcy, says that the four have claims totaling $3.8 million. They are Matthew Haddad of Los Angeles, $2.6 million; Goldberg Healthcare Partners LLC of Beverly Hills, $535,000; Frank Saidara of Los Angeles, $110,000; and Yoel Pesso of Los Angeles, $500,000. The petition was filed in bankruptcy court in Delaware by Chicago attorney Aaron Hammer. It lists a principal place of business for SA Hospital, tied to Lawrence Feigen and Jeff Ahlholm, of Newbury Park, Calif. A California bankruptcy judge last month tossed an attempt by SA Hospital to file for bankruptcy, since the hospital is in receivership. A former nurse at the facility sued SA Hospital in August, seeking class-action status over claims that it violated federal law by failing to timely file notice of the facility's closure that month. The closure impacted 563 employees, according to the hospital's filing with the state. Read more.

The financially troubled healthcare sector will be the focus of the ABI Healthcare Program, September 18-19, 2023, in Nashville, Tenn. For more information and to register, click here.

Bankrupt electric vehicle manufacturer Lordstown Motors has proposed to pay nothing for Taiwan's Foxconn's preferred equity shares, saying it will prioritize other shareholders if an ongoing sales effort generates enough cash to repay other debts, Reuters reported. Lordstown Motors, named for the Ohio town where it is based, filed a chapter 11 plan on Friday in Delaware bankruptcy court, outlining how it intends to distribute proceeds from an ongoing effort to sell its assets. Lordstown's chapter 11 plan warned that the value of its assets is "necessarily speculative" at this stage in the bankruptcy and "could potentially be zero." Lordstown has set a Sept. 8 deadline for bids, with a Sept. 19 auction to follow. The company's shareholders would only be paid after its creditors and Lordstown's chapter 11 plan did not include an estimate of how much creditors are owed. Lordstown reported in earlier court filings that it owed about $20 million to 30 trade vendors, and recently agreed to pay $40 million to settle a trade secrets lawsuit filed by rival automaker Karma.

The collapse in cryptocurrency prices last year forced a procession of major firms into bankruptcy, triggering a government crackdown and erasing the savings of millions of inexperienced investors. But for a small group of corporate turnaround specialists, crypto’s implosion has become a financial bonanza, the New York Times reported. Lawyers, accountants, consultants, cryptocurrency analysts and other professionals have racked up more than $700 million in fees since last year from the bankruptcies of five major crypto firms, including the digital currency exchange FTX, according to a New York Times analysis of court records. That sum is likely to grow significantly as the cases unfold over the coming months. Large fees are common in corporate bankruptcies, which require complex and time-intensive legal work to untangle. But in the crypto world, the mounting fees have sparked widespread outrage because many of the people owed money are amateur traders who lost their personal savings, rather than corporations with the ability to weather a financial crisis. Lawyers and other bankruptcy professionals argue that they are charging market rates for difficult work that will ultimately help recover the money that crypto investors lost. In the FTX case, Sullivan & Cromwell has said that it has scraped together more than $7 billion in assets, though it’s unclear how much of that total will go back to creditors. A spokesman for FTX’s new management said the bankruptcy was “extraordinary in almost every conceivable way,” requiring professionals to recreate records from scratch and track down missing funds. Andrew Dietderich, a partner at Sullivan & Cromwell, said in a statement that the lack of clear crypto regulations made the cases more complex and time-consuming, driving up costs.

The Baltimore Archdiocese is considering filing for bankruptcy as it anticipates a potential flood of lawsuits starting Oct. 1, when a new Maryland law will lift the statute of limitations on claims from those who say they were sexually abused as children, according to internal emails among church officials and a communications specialist, the Baltimore Sun reported. While many have expected the nation’s oldest archdiocese might file for bankruptcy as dioceses in other states have done in the face of child sex abuse lawsuits, an email chain obtained by the Baltimore Sun confirms this is an option under consideration. “I would suggest reverting back to the plan of not ‘announcing’ until the time of filing, and only confirming, if the media picks up on our internal conversations, that we are sharing information about the upcoming law change,” wrote Sean T. Caine of Caine Communications on Friday, “what it means, how it might impact the various agencies of the Church, and how the Church may respond. “The issue of bankruptcy was raised among many optional responses,” he wrote. Asked about a potential bankruptcy, Christian Kendzierski, the spokesman for the archdiocese, said in an emailed statement that officials are “preparing for the impact of the new law” and “considering how to best respond to it.