Ondo Finance Founder’s Estate Sparks Control Lawsuit
Nathan Allman, founder of tokenized asset company Ondo Finance, unexpectedly passed away on May 25 at the age of 32 without a will. A Hawaii court subsequently appointed his parents as heirs to his estate, which includes controlling shares in the company and a significant amount of unlocked and future ONDO tokens set to unlock over the next three years.
At the time of his death, he was serving as CEO, the sole sitting director, and the controlling shareholder, with another board seat vacant, making it temporarily impossible to exercise voting rights after the estate was established. The company announced that long-time president Ian De Bode would take over as CEO. After Kathleen Allman, his mother, became the personal representative of the estate on June 26, she appointed herself as a director with written consent from shareholders, expanded the board, and on July 24 voted to remove De Bode from all positions, appointing herself as chair and interim CEO.
She filed a lawsuit in Delaware Chancery Court, alleging that De Bode claimed to automatically take over without a board resolution and pushed for a compensation and token incentive package worth approximately $11 million within about a week of the founder's death: an annual salary and bonus of about $900,000, a signing bonus of $1 million, and around 26 million restricted token units valued at over $9 million, along with approximately 846,000 shares that could increase his stake from about 0.33% to about 8%. She seeks to have the appointments and incentives declared invalid and to claim for breach of fiduciary duty. De Bode has called the allegations baseless and claims to have the support of major investors and the foundation. On September 3, the court ordered that he remain as interim CEO and director.
On the same day, a separate branch emerged: a half-sister and investor David Chen applied to the Hawaii court for limited guardianship over Kathleen's share of the estate, citing cognitive and financial risks, which she denied. The company declined to comment on the latest reports. Allman left Goldman Sachs' digital assets team in 2021 to found Ondo, whose products include USDY, the U.S. Treasury fund OUSG, and tokenized stocks, with a total locked value of approximately $3.5 billion to $3.8 billion at the time of his death.
Mechanically, this sudden absence of the founder has split the equity, token unlocks, and daily operational rights into three lawsuits: the question of whether the tokenized treasury and stock channels can continue to operate as originally intended, and the governance discount during the vacuum of control. Beneficiaries include agreements and long-term counterparties that can continue to provide market-making; those under pressure include the ONDO circulating supply and the narrative of the company as a single founder brand. The lack of a will means that the parents inherit while professional managers simultaneously assert that "the company must operate," with Delaware and Hawaii procedures running in parallel.
Additionally, Gordon Liao was nominated as a director but declined to serve; another child has entered the board. The validity of the incentive plan and control remains to be confirmed by the Chancery Court.
Source: Public Information
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Allman consolidated the roles of CEO, sole director, and controlling shareholder into one person, and after his death, all three powers entered the estate simultaneously. The lack of a will is not just a private detail; it brings Delaware corporate law and Hawaii inheritance law onto the same timeline. De Bode took over for operational continuity, while the mother restructured the board according to shareholder voting rights, both using the rationale that "the company cannot stop," disputing who has the authority to issue compensation packages during the standstill. The focus of the $11 million package is not just the salary figure, but the fact that tokens and equity could amplify the manager's stake by more than twenty times.
Capital has already treated Ondo as a channel in the tokenized treasury space, yet the control of that channel lacked prepared directors and voting proxies. The foundation and lead investors declared support for the current management to avoid product standstill; the estate side wants the roster and records to prevent incentives from being written into the bylaws during the vacuum. The internal family request for guardianship indicates that the inheritance shares themselves may also be further divided, and the unlocking schedule could become an attachment to the court.
In contrast to the bankruptcy takeover after the absence of the FTX founder, the separation of criminal and corporate lines for the Terra founder, and traditional family businesses vying for independent director seats in Delaware. Crypto companies have layered token unlocks, equity, and foundation governance together; once the founder disappears, all three clocks run simultaneously. The industry phase reflects that the issuance of real-world assets has become institutionalized, yet governance remains a one-person company. Whoever can maintain continuous minting, redemption, and compliance reporting during the litigation period will preserve the channel premium.
The structure belongs to the reconstruction of control rights under the intersection of regulation and corporate law. On-chain tokens continue to unlock according to contract, while off-chain voting rights are stalled in estate certification. The mechanism is: the lack of a will turns control into a procedural issue; during the procedural gap, the person who first occupies the CEO title can propose incentives, and the person who first obtains personal representative status can change the board. Without the court first determining which board meeting is valid, the compensation package and product direction remain in a temporary state.
ABAB News · Law of Cognition
- Without a will, controlling equity can lead the company into two courts.
- When the independent director and CEO roles are consolidated in one person, the vacuum itself is power.
- Tokens unlock monthly, but voting rights follow estate certification.