Kirkland & Ellis is currently the legal representative of many crypto exchanges that are faced with bankruptcy.
Legal advisor Kirkland & Ellis has charged bankrupt crypto brokerage firm Voyager Digital the sum of $1.1 million in legal fees for their work in April.
The fund is for fees and expenses related to its work on the erstwhile brokerage firm’s bankruptcy process. According to the documents, some of Kirkland & Ellis’ highest-paid partners charged as high as $2,000 per hour for their part of the litigation. Some other lawyers billed the bankrupt crypto exchange up to $150,000 for the month.
Markedly, the law firm had a blended hourly billing rate of $1,313.18 for all services in April.
One of Kirkland & Ellis’ litigation partners, identified as George W. Hicks Jr., P.C, is asking for $153,211 in fees for 87.8 hours of work. Another associate, Nicholas Adzima, requested $147,906 in compensation for 118 hours of work in April.
Beyond Voyager Digital: Bogus Legal Fees Rock Crypto Firms
Kirkland & Ellis is currently the legal representative of many crypto exchanges that are faced with bankruptcy. Last year was a terrible time for the broad crypto industry with the harsh bear market that forced many into insolvency and later, bankruptcy. Voyager Digital, Celsius Network, BlockFi, and many other crypto-related firms including mining companies filed for bankruptcy protection against investors and other creditors.
Shockingly, renowned cryptocurrency exchange FTX also shared the same fate when it resorted to filing for Chapter 11 bankruptcy in the United States. The FTX implosion and bankruptcy shook the entire crypto industry and led to further collapse of a few more firms.
While this period was bearish for the crypto firms, it turned out to be a bullish market for law firms.
By October last year, Celsius Network had already incurred over $3 million in legal fees payable to Kirkland & Ellis and another law firm called Akin Gump. Between July 13th to July 31st, Kirkland and Ellis charged Celsius Network $2.6 million as legal fees while Akin Gump asked the embattled exchange to pay $750,000. This was in addition to all the financial difficulties that Celsius was faced with at the time.
Similarly, FTX’s June 15th court filing showed that between February 1st, 2023 and April 30th, 2023, the bankrupt crypto exchange had paid more than $121 million in legal, consulting, and financial services. These fees were paid to the law firm representing FTX, Sullivan & Cromwell, investment banking firm Jefferies Group LLC and restructuring consultancy firm Alvarez and Marsal.
Notably, the banking firm received the smallest percentage of the fees while the law firm received more. So far, Celsius Network has spent more than $50 million on its bankruptcy legal proceedings while FTX’s legal fees have reached over $200 million. Fintech company Ripple Labs revealed recently that its over-two-year-long lawsuit with the Securities and Exchange Commission (SEC) has cost over $200 million.