Fees collected by lawyers and restructuring team working at bankrupt cryptocurrency exchange FTX have surpassed $200 million in just over seven months, but an independent audit argues that it makes sense, given the mammoth task.
On June 20, the court-appointed fee examiner, Katherine Stadler, presented a 47-page report on fees charged by law firms in the roughly three months after FTX’s bankruptcy on November 11 and concluded that they were not “totally unreasonable at the time.”
He highlighted the “largely unregulated financial system” in which FTX operates, adding that the case was “remarkable” for the exchange’s “global reach.”the total absence of corporate records and the non-existence of even the most basic corporate governance.”
FTX Professional Fees
This continues to be an extremely expensive case and the Estate has been petitioned for nearly $225mm over 5.5 months (with a couple small stragglers remaining).March fees peaked at $1.6mm PER DAY!
Fortunately, April is trending positively downward. pic.twitter.com/eMTJC3R9Xr
— Mr. Purple ️ (@MrPurple_DJ) June 14, 2023
On FTX’s professional fees: This is still an extremely expensive case and the estate has been requested for almost $225 million in 5.5 months (with a couple of small stragglers remaining). March fees peaked at $1.6 million a day. Fortunately, April tends positively downward.
Stadler confirmed that the team working on FTX had “requested more than $200 million in fees” since its bankruptcy in November.and added:
“Despite the relative scope of the pool of known assets, these procedures seem on track to be very expensive by any measure.”
She gave a glowing review of the FTX turnaround team, saying she was “impressed” by those who “spoke into action” to “start transforming a smoldering pile of rubble.”
“The fees earned to date are remarkable, but so is the performance of the professionals.”
“Very few companies could have achieved what these professionals did in 90 days,” Stadler added.
charge by the hour
Stadler’s report breaks down the fees charged by law firms in first weeks after FTX filed for Chapter 11 bankruptcy in the United States.
According to the report, The hourly fees of the 242 attorneys in the case ranged from $388 to $2,165, with 46 of them charging more than $2,000 per hour.
The New York-based law firm Sullivan & Cromwell is the top payer: has collected some USD 42 million in fees and expenses.
The consultants Alvarez & Marshal were next on the list, pocketing more than $28 million in fees and expenses.
Previously, Cointelegraph analyzed the billing of the five firms involved in the proceeding and found that they collectively billed over $100 million in Q1 2023.
Stadler added some advice, saying that “careful administration of administrative expenses will translate into a better outcome for creditors.” along with a “conscious and cost-effective” Chapter 11 process.
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