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Archegos Capital Management is reportedly preparing for insolvency as banks seek to regain roughly $10 billion in combined losses suffered during the meltdown in March, the Financial Times reported Wednesday. 

According to the report, Bill Hwang's family office has hired restructuring advisers to navigate financial and operational obstacles as well as the potential legal claims from the banks involved.

Credit Suisse, Nomura, Morgan Stanley, UBS, MUFG, and Mizuho all lost billions each after Bill Hwang's family office failed to meet margin calls on highly levered positions in a handful of stocks.

As a result, some of the banks are drafting "letters of demand" to the firm requesting repayment before filing legal claims, according to the Financial Times.

On Wednesday, UBS Group Chairman Axel Weber apologized for the loss the bank suffered amid the Archegos fiasco in an interview with Bloomberg TV.

Weber blamed the episode on a lack of oversight of family offices, which do not have to disclose as much information about investments to regulators compared to other asset managers, such as hedge funds. 

Policymakers and executives including Morgan Stanley CEO James Gorman have suggested tougher regulation on family offices, though no proposals surfaced to date since. 

The implosion of Archegos caused widespread chaos on Wall Street and exposed the fragility in parts of the financial system, especially in lesser-known areas such as total return swaps.

The founder, a former Tiger cub, grew his $200 million investment to $10 billion but did not need to register as an investment advisor since he was only managing his own wealth.

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