Bankruptcy Proceedings Come At A High Cost For FTX, Law Firm To Earn Millions
Sullivan & Cromwell law firm has billed FTX $7.5 million for just 19 days of work.
The fees and expenses are expected to drain the firm’s resources as it seeks to reorganize and restore funds to creditors.
The FTX bankruptcy case has proved to be a lucrative opportunity for Sullivan & Cromwell, a well-known law firm, as it is expected to earn millions in fees for handling the fallen crypto empire’s finances.
According to a recent court filing, Sullivan & Cromwell has already billed them $7.5 million for just 19 days of work on the case. Despite concerns raised by US lawmakers, the executive branch, and FTX founder Sam Bankman-Fried about the firm’s previous work for the company and the appointment of former partner Ryne Miller as FTX General Counsel, the new CEO of FTX, John J. Ray III, has defended the firm’s appointment, calling it a leading law firm in relevant areas.
Sullivan & Cromwell law firm set to reap millions
The filing covers fees and expenses from November 12th to November 30th and reports that over 6,500 hours were worked by 32 partners, 85 associates, and 34 non-legal staff. The hourly rates range as high as $2,165 and the company said it is seeking only 80% of the total $9.5 million. This drain on the estate of the corporate group as it seeks to reorganize and restore funds to creditors will be significant.
Bankruptcy judge John Dorsey will make a crucial decision today regarding the appointment of an independent examiner for the case, which FTX has warned could cost up to $100 million and duplicate Sullivan & Cromwell’s work. However, a spokesperson for Sullivan & Cromwell was not available for comment.
A Bankruptcy Filing Could Be Resource-Exhaustive Too!
The FTX bankruptcy case has attracted widespread attention due to the high costs associated with the case, which are expected to climb more with over 150 people working on it. Big bankruptcy cases like this can generate a lot of work and help pad profits for law firms.
This case serves as a reminder of the high costs associated with bankruptcy proceedings, particularly for large corporations. While the legal fees can be a significant burden for the corporate group, it is important for the court to appoint a reputable and reliable law firm to ensure a fair outcome for all parties involved.