The FTX Estate, run by John Ray III, has successfully liquidated its investment in Anthropic, the AI startup known for its chatbot Claude. This move, finalized on June 1, 2024, marks a positive development for creditors as it injects significant capital into the ongoing bankruptcy proceedings.
The estate sold its remaining 15 million Anthropic shares at $30 each, generating over $450 million. This brings the total proceeds from the sale to roughly $1.3 billion, exceeding the initial $500 million investment by a substantial margin. FTX ultimately profited approximately $800 million from its involvement with Anthropic. Notably, the share price remained consistent with the first sale conducted in March 2024.
Anthropic saw a third of its shares purchased by global venture capital fund G Squared, a major venture capital firm, which acquired (which equaled one-third of the remaining stake) for $135 million. The remaining shares were distributed among twenty other venture capital buyers, showing strong interest in the AI sector.
Rising Concerns Over FTX Bankruptcy Costs
However, the positive developments surrounding the Anthropic investment are overshadowed by rising concerns regarding the overall cost of the FTX bankruptcy. As reported by The Block, legal and administrative fees have surpassed $500 million.
Adding to this concern are potential conflicts of interest raised by FTX creditors regarding Sullivan and Cromwell, the law firm overseeing the bankruptcy process. This firm previously represented FTX before its collapse, prompting demands for an independent examiner and a class-action lawsuit. Last year, an analysis by the New York Times also revealed a troubling pattern of law firms charging excessive fees in crypto company bankruptcies.
The court documents outlined that Sullivan and Cromwell led the pack with $254 million in approved fees. However, their initial bill was as high as $360 million. Financial advisory firm Alvarez and Marsel came in next with $133 million.
Other notable entities, including forensic investigations consultant AlixPartners, special counsel Quinn Emanuel Urquhart & Sullivan, investment bankers Perella Weinberg Partners, and co-counsel Landis Rath & Cobb, collected a total of $57 million in fees.
Despite the increasing legal fees, the FTX Estate is determined to pay off its creditors. They aims to repay at least 118% of permitted claims to 98% of creditors. The successful sale of the Anthropic stake signifies a significant step towards achieving this goal.
The FTX saga continues to unfold, with the latest developments highlighting the complexities of navigating large-scale crypto bankruptcies. While the Anthropic sale offers a financial lifeline, the rising costs associated with the bankruptcy process raise concerns about the overall efficiency of the proceedings.
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