FTX attorneys to reap thousands and thousands from the chapter case: Report

Based on a brand new report, the controversial legislation agency Sullivan & Cromwell is on monitor to reap a fortune from its work on the FTX cryptocurrency change’s chapter case.

Sullivan & Cromwell’s prices within the FTX case are estimated to succeed in tons of of thousands and thousands of {dollars} earlier than the agency’s chapter investigation is over, Bloomberg Legislation reported on Jan. 27.

Because the FTX trial is scheduled for October 2023, the agency’s attorneys now have about eight months to untangle the sophisticated FTX case, which can value lots of money and time. Sullivan & Cromwell has greater than 150 folks engaged on the FTX case, together with 30 companions with charges exceeding 2,000 per hour. The report notes that associates are charging as much as about $1,500 per hour, citing a courtroom submitting.

Supply: Bloomberg Legislation

In a courtroom declaration, Sullivan & Cromwell stated that its proposed charges are in accordance with market charges by different main legislation corporations and truly signify a reduction from the charges utilized in non-bankruptcy issues.

Chapter specialists have been dealing with a excessive demand because the crypto winter of 2022 generated many chapter filings, together with these by main crypto corporations like Genesis World Buying and selling, Celsius Community and Voyager Digital.

Based on Jonathan Lipson, a Temple College legislation professor, attorneys are going to do very nicely in circumstances like FTX, “simply because the professionals have performed very nicely in different huge circumstances.” For instance, New York-based legislation agency Weil Gotshal made about $500 million in charges from the chapter of Lehman Brothers in 2008.

Lipson stated that such huge bills might be justified as Sullivan & Cromwell can probably assist investigators recuperate cash from FTX, stating:

“The essential query is rarely are the attorneys charging rather a lot. It’s, is it price it? If they’ll recuperate some huge cash, then it’s in all probability price it.”

The information comes shortly after FTX chapter choose John T. Dorsey on Jan. 19 authorised Sullivan & Cromwell’s retention as FTX’s authorized staff regardless of controversy in regards to the agency allegedly having potential conflicts of curiosity within the case.

The choice got here regardless of issues associated to Sullivan & Cromwell having suggested FTX since earlier than it filed for Chapter 11 safety in November 2022. On Jan. 9, United States senators John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis referred to as on the choose to approve a movement to nominate an impartial examiner into FTX’s actions. 

Associated: SBF says Sullivan & Cromwell contradicted itself with insolvency claims

Sullivan & Cromwell subsequently emphasised that the legislation agency has “by no means served as main outdoors counsel to any FTX entity” and had a “restricted and largely transactional relationship with FTX and sure associates previous to the chapter.”

The agency didn’t instantly reply to comply with up questions from Cointelegraph.


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