By
Chimamanda U. Martha
April 19th, 2024
Some partners at the law firms involved in FTX’s bankruptcy proceedings have charged a hefty fee north of $10,000 even for a single day’s work.
As per the bankruptcy court filings on Tuesday, February 7, some of the top bankruptcy, legal and financial advisors, lawyers of FTX have billed a staggering $19.6 million in fees for the work done in 2022. Over $10 million i.e. 50% of the amount stood as charges for November 2022, the month of FTX’s bankruptcy filings.
FTX Lawyers
As per the court-ordered interim compensation plan, the law firms will initially receive a little over $15.5 million, or 80% of the value of their work. Some of the law firms who have billed FTX post-bankruptcy filing are Landis Rath & Cobb, Sullivan & Cromwell, and Quinn Emanuel Urquhart & Sullivan. Others include professional advisor Alvarez & Marsal as well as financial advisor AlixPartners.
These firms have billed FTX for the work that involves taking meetings with other companies, who have also billed FTX, for their time in coordinating with current and former FTX employees. FTX’s primary legal firms – Landis Rath & Cobb and Sullivan & Cromwell – have put a combined bill of more than $10.7 million for 8400 hours of work.
Of these, Landis Rath & Cobb has billed $1.16 million for the work done in the period between Nov. 11 and Nov. 30. On the other hand, Sullivan & Cromwell has sought more than $9.5 million in compensation for a staggering 6,500 billable hours in the period between November 12 and November 30. Roughly half of the billable hours correspond to the work of partners, who typically have the highest hourly rate.
As per the filings, Sullivan & Cromwell had assigned nearly two dozen partners to uncover the mess around FTX. Jim Bromley, a partner at Sullivan has alone billed for 178 hours for the weeks between November 12 and November 30.
Uncovering the FTX Mess
The legal court filings provide a glimpse into the massive amount of work that went into untangling the mess at the crypto exchange FTX. The lawyers had to go through the complex web of accounts at the crypto exchange FTX.
In November alone, lawyers at Sullivan & Cromwell spent 1,900 hours analyzing and recovering FTX’s global asset base. Advisory firm Alvarez & Marsal billed a total of $1.9 million for over 2,300 hours of work on “business operations”. This includes meetings with FTX executives, and lawyers, and analyzing FTX’s holdings using blockchain explorers. Besides, they also reviewed the “cybersecurity scenarios” relating to the crypto exchange FTX. These operations involved multiple hours in November.
For the work done in November and December, Quinn Emanuel billed more than $1.5 million. They assigned two dozen lawyers for the job of which nine were partners. Sascha Rand, one of those partners billed $13,000 for a single day’s work. Another Quinn lawyer billed $17,000 on a “non-working travel” day trip.
Financial consulting firm AlixPartners billed $1.1 million for the work done for a little over a month between November 28 to December 31. As CNBC reports:
“FTX’s advisors aren’t entitled to their full fees yet. Under an interim compensation order, professional advisors are paid 80% of their filed fees, provided that no objection is filed. Full compensation for legal and advisor fees will not occur until a final fee application is filed, whenever FTX’s bankruptcy saga concludes”.
Read other business news on Coinspeaker.