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Sam Bankman-Fried’s Emergent Fidelity Technologies Ltd., an offshore entity that owns 55 million shares of Robinhood Markets Inc., filed for bankruptcy Friday amid a fight over who should get the stock following the collapse of FTX Group, Bloomberg News reported. The Robinhood stake, worth more than $590 million at current market prices, has been seized by the U.S. government, but its ultimate fate is unclear. A hodgepodge of parties including the Justice Department, bankrupt crypto lender BlockFi Inc., and Bankman-Fried himself, are trying to take the shares for good. The chapter 11 filing gives Emergent Fidelity and its liquidators — appointed by a court in Antigua — some breathing room. The liquidators’ “duties are to the debtor’s creditors, whoever those creditors may be,” Angela Barkhouse, one of the liquidators, said in a sworn court statement. “Given the many parties claiming to be creditors or outright owners of the debtor’s assets in proceedings in the U.S., the JPLs 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.” Emergent Fidelity also holds $20.7 million of cash, but has no other assets, according to court papers.

A Washington, D.C., townhouse that FTX’s new management has linked to Sam Bankman-Fried ‘s political spending has been pulled off the market after the company alleged that the $3.3 million property was purchased with FTX customer funds, WSJ Pro Bankruptcy reported. Property records show the four-bedroom, 4,100-square-foot property in Capitol Hill is owned by Guarding Against Pandemics, a nonprofit organization founded by Mr. Bankman-Fried’s brother Gabriel. FTX’s newly appointed management team said in a court filing last month that Guarding Against Pandemics was also funded by FTX founder Sam Bankman-Fried and that the organization purchased a multimillion-dollar property using what the company believes are misappropriated customer funds. The listing was taken off the market after WSJ Pro Bankruptcy contacted the real-estate agent representing the property on Thursday. Devon Fox, who handled the Capitol Hill listing, said the seller pulled it as a show of good faith. On Friday morning, a for-sale sign remained in front of the townhouse in Northeast Washington. A representative for Guarding Against Pandemics said Thursday that Gabriel Bankman-Fried is no longer part of the organization. Representatives for Gabriel Bankman-Fried and Sam Bankman-Fried didn’t respond to requests for comment. U.S. prosecutors have said that former FTX Chief Executive Sam Bankman-Fried misused customer deposits at FTX to fund his trading firm Alameda Research and make political donations. He has pleaded not guilty to prosecutors’ charges.

Embattled FTX founder Sam Bankman-Fried has staved off a case alleging he broke Texas securities laws, after a judge ruled that the state regulator lacks jurisdiction to act against him, Bloomberg News reported. The ruling came in a case brought by the Texas State Securities Board claiming Bankman-Fried offered unregistered securities through FTX’s yield-bearing cryptocurrency accounts and that he now owes refunds to Texas investors. Administrative Law Judge Sarah Starnes has canceled a Thursday hearing at which Bankman-Fried had been ordered to testify and has given the securities agency until March 1 to file an amended complaint. Joe Rotunda, the agency’s director of enforcement, didn’t return messages seeking comment on the ruling, and it isn’t clear whether he will refile. But the case reflects the early efforts some states are making to recover money from FTX and Bankman-Fried in the wake of the crypto exchange’s implosion in November. The obstacles: a criminal fraud prosecution of Bankman-Fried and a sprawling FTX bankruptcy case.

Phoenix Services, a Radnor company that keeps the largest U.S. steel mills running by recycling their molten slag, is in its sixth month of bankruptcy reorganization, as tons of waste pile up at its clients’ plants, the Philadelphia Inquirer reported. Since Phoenix filed for chapter 11 reorganization in September, those are the rival stories lawyers have told in the fight over the future of the slag disposal company. Phoenix’s fleet of 1,700 custom-built machines clears off hot waste at mills owned by Nucor, U.S. Steel, ArcelorMittal, Cleveland-Cliffs and other big steelmakers and sells it for construction and road material. Past buyers include PennDOT. Phoenix is using the bankruptcy to force new terms on the steelmakers. Nucor, the largest U.S.-based steelmaker, is fighting back, refusing Phoenix’s pricing proposals and demanding the court set up a detailed plan for removing Phoenix’s bulky, specialized vehicles and on-site recycling facilities — or leave them so someone else can take over the work. If there’s not a plan soon, Nucor says a growing slag backlog at its large Southern mills may force it to cut production, threatening potential shortages or price hikes on the carmakers and other manufacturers who rely on American steel. Phoenix has balked at Nucor’s proposal and its claims, arguing there will be adequate steel available even if it pulls out, and that it needs flexibility to move its equipment to new clients at its own pace.

Johnson & Johnson faces an uphill battle to salvage its strategy for settling roughly 40,000 cancer lawsuits concerning its talc-based products through a subsidiary’s bankruptcy after a court rejected the company’s tactic, WSJ Pro Bankruptcy reported. The ruling by the U.S. Court of Appeals for the Third Circuit dismissed the chapter 11 case of J&J’s talc subsidiary, LTL Management LLC, and could force the consumer health giant to resume defending the mass personal injury lawsuits against it on a case-by-case basis, rather than through a single bankruptcy proceeding. J&J has long maintained its talc products are safe and won a majority of trials over the talc allegations. J&J has said that it would challenge the appeal’s court’s ruling. J&J has some avenues to challenge the decision dismissing LTL’s case, authored unanimously by a three-judge panel on the Third Circuit. The company has the right to ask all of the judges sitting on the appeals court to weigh in, a request that litigants often make in high-stakes cases. More than 20 appellate judges sit on the Third Circuit, according to the court’s website. It’s up to the Third Circuit to decide whether all of the judges on the appeals court will reconsider LTL’s case. The company can also request a stay of Monday’s ruling while appealing further.

A U.S. judge on Wednesday temporarily barred FTX founder Sam Bankman-Fried from contacting current or former employees of the cryptocurrency exchange or his Alameda Research hedge fund, and from using encrypted messaging tools including Signal, Reuters reported. The ruling by U.S. District Judge Lewis Kaplan came after federal prosecutors in Manhattan said Bankman-Fried might tamper with witnesses or destroy evidence in his criminal fraud case. He was arrested in December on charges of looting billions of FTX customer funds, and lying to investors and lenders. Prosecutors last week cited a Signal message Bankman-Fried sent on Jan. 15 to the general counsel of the FTX U.S. affiliate, referred to in court papers as "Witness-1." Bankman-Fried proposed the two speak on the phone to try to "have a constructive relationship" or "vet things with each other." Bankman-Fried, 30, has been under house arrest at his parents' California home after pleading not guilty. His lawyers said last week that his efforts to contact the general counsel the company's current chief executive, John Ray, were attempts to offer "assistance" and not to interfere.

Johnson & Johnson‘s loss in a federal appeals court over baby-powder litigation could force the health-products company to defend thousands of lawsuits case by case, just as it navigates the biggest restructuring in its 137-year history, the Wall Street Journal reported. The decision by the U.S. Court of Appeals for the Third Circuit rejecting J&J’s efforts to use bankruptcy proceedings to handle talc-related lawsuits means the company won’t be able to resolve the allegations as soon as it could have and in a single court, according to legal experts and analysts. It could also deter other companies from trying the same legal tactic, the legal experts said. For J&J, the ruling could mean it will have to contest the lawsuits in state and federal courts, and the litigation will probably take years longer as cases would revert to standard civil proceedings in each of the courts, the legal experts and analysts said. It could also raise J&J’s talc-settlement costs to as much as $10 billion, according to Wells Fargo analyst Larry Biegelsen. Neal Katyal, outside counsel for the J&J subsidiary, LTL, said the appellate ruling turned on the view that LTL didn’t meet a technical requirement of facing sufficient financial distress. “But the current situation, with a significant volume of current and future claims, and a plaintiff bar business model primed to generate more, is exactly the sort of ongoing and future financial distress that courts have recognized as serving a valid bankruptcy purpose,” he said. “The same conclusion should have been reached here.”

Alameda Research Ltd., Sam Bankman-Fried’s defunct crypto trading house, is seeking to claw back about $446 million from bankrupt digital asset lender Voyager Digital Ltd, Bloomberg News reported. The funds are related to cryptocurrency loans Voyager provided to Alameda before Voyager filed for bankruptcy in July. Alameda repaid the loans shortly before its own bankruptcy filing, so it’s trying to get the funds back using bankruptcy rules designed to ensure some creditors aren’t favored over others, court papers show. Alameda may uncover additional payments it wants to recover while the lawsuit unfolds, its lawyers said in court papers. Voyager and Alameda are deeply intertwined. When Voyager filed for bankruptcy, court papers showed Alameda lent to Voyager, borrowed from it and was one of its largest shareholders. FTX, the crypto exchange portion of Bankman-Fried’s empire, was slated to buy Voyager out of bankruptcy prior to the exchange’s November implosion. “Largely lost in the (justified) attention paid to the alleged misconduct of Alameda and its now-indicted former leadership has been the role played by Voyager and other cryptocurrency ‘lenders’ who funded Alameda and fueled that alleged misconduct, either knowingly or recklessly,” lawyers for Alameda wrote in its complaint, filed Monday in bankruptcy court.

When Jean Chalopin applied to buy a tiny bank in Washington state nearly three years ago, he made modest promises to bring not-so-new innovations such as ATM cards to a place with few local banking options. Farmington State Bank’s business plan wouldn’t change, Chalopin, a onetime TV and film producer who co-created the “Inspector Gadget” cartoon, assured federal regulators in documents viewed by the Wall Street Journal. But it wasn’t long before the bank got a new name, Moonstone, and new target customers in the high-risk cryptocurrency and cannabis industries. It also got a new shareholder: Sam Bankman-Fried’s crypto-trading firm, Alameda Research LLC. Alameda paid $11.5 million for a stake in Moonstone at a roughly $115 million valuation, which was 37 times the $3.1 million Mr. Chalopin paid for the bank 18 months earlier. Executives from Mr. Bankman-Fried’s crypto exchange, FTX, discussed using the bank to offer interest-bearing crypto accounts and lend out depositors’ digital assets. Bankman-Fried’s crypto empire collapsed in November, thrusting the little-known bank into the spotlight. Lawmakers are pressing for information about whether Alameda used FTX customer funds to pay for its stake in the bank. Mr. Chalopin, a pair of Democratic senators noted in a letter to banking regulators in December, chairs Deltec International Group, the crypto-friendly Bahamian bank with close ties to FTX. Last week, the new management team steering FTX through bankruptcy asked a judge to approve a subpoena for records related to Moonstone from Mr. Bankman-Fried and other FTX insiders. The Justice Department in early January seized about $50 million that an FTX entity held at Moonstone — about 77% of the total deposits the bank reported holding at the end of 2022. Moonstone said it is getting out of crypto and cannabis and returning to its community-banking roots.

Madonna sang the praises of nonfungible tokens, or NFTs, depicting cartoon portraits of bored apes. Tampa Bay Buccaneers quarterback Tom Brady appeared in commercials endorsing crypto exchange FTX, which collapsed suddenly in November. And Kim Kardashian gushed about EMAX tokens on Instagram. Now they and other celebrities are facing civil lawsuits from investors who suffered losses on virtual assets, as well as scrutiny by regulators for allegedly duping the investing public, the Wall Street Journal reported. The legal actions, which have prompted some agents to caution their clients against financial endorsements, could clarify the ground rules for crypto promotions, as well as the hurdles investors must clear to hold promoters liable when investments go south. “Promoting a company and promoting a security issued by a company are not necessarily the same thing,” said Tibor Nagy Jr., an attorney who represents both plaintiffs and defendants in the cryptocurrency space. “We should expect judicial guidance and clarity on the rules of the road for celebrities in the next few months.” The use of celebrity promoters heated up in 2021 during the massive bull run in crypto. Last year, celebrity crypto ads filled prominent slots in the Super Bowl, the largest marketing event of the year. Lawyer Sean Masson, of law firm Scott + Scott, who has filed several proposed class-action suits, said celebrities found they could be compensated simply for touting a token, without realizing their legal obligations under federal and state rules governing endorsements and compensation.