FTX Spends Millions on Bankruptcy Lawyers, Raises Concerns over Advisory Firms' Charges
Summary:
FTX, a crypto exchange, has been spending around $53,000 per hour on bankruptcy lawyers and consultants for the three months ending in October, amounting to an overall sum of $118.1 million. The largest services bill was from Alvarez and Marshall at $35.8 million, followed by Sullivan and Cromwell at $31.8 million. An FTX debtholder suggested the total legal costs since the bankruptcy case began is around $350 million. Some of the invoices from the advisory firms have raised “significant areas of concern” as pointed out by the court-appointed fee examiner.
Throughout the three months ending October 31, cryptocurrency platform FTX has spent around $53,000 per hour on bankruptcy lawyers and consultants, as indicated by recent remuneration filings. Reports filed from December 5 to 16 reveal that the total sum charged by these lawyers amounts to a staggering $118.1 million between August 1 and October 31, averaging to $1.3 million daily or $53,300 hourly. The management consulting firm Alvarez and Marshall led the charge with a billing of $35.8 million for their three-month service. Following closely was the international law firm, Sullivan and Cromwell, which billed $31.8 million, with its hourly rate calculated to an average of $1230. AlixPartners, a global consulting firm, hefty invoice stood at $13.3 million for professional services linked to forensic research. Other firms such as Quinn Emanuel Urquhart & Sullivan billed $10.4 million, with multiple smaller advisory billings totaling over $26.8 million.
An anonymous FTX debtholder posted to X (formerly Twitter) on December 17, implying that the total legal expenses since the commencement of the FTX bankruptcy case round up to an estimated $350 million.
A preliminary report filed by Katherine Stadler, the court-appointed fee examiner, on December 5, pointed out some “significant areas of concern” regarding the invoices submitted by major advisory agencies, including Sullivan and Cromwell and Alvarez and Marshall, spanning the period of May 1 to June 31. The report highlighted issues like potential overstaffing, excessive meeting attendance, non-working travel time charges, and a variety of technical and procedural inadequacies regarding some time entries. The fee examiner critiqued the advisory firms for overcharging.
Published At
12/18/2023 8:44:26 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.