amp cromwell

The Lawyers Sam Bankman-Fried Once Trusted Are Drawing Criticism

Just before FTX collapsed in November, one of its outside lawyers at the law firm Sullivan & Cromwell emailed a colleague at another firm, insisting that the cryptocurrency exchange’s finances were stable.

Rumors of FTX’s demise were “silliness,” the lawyer, Andrew Dietderich, wrote. “FTX is rock solid, doesn’t use customer funds or take credit risk at all,” he said.

Four days later, FTX filed for bankruptcy. Mr. Dietderich quickly arranged for Sam Bankman-Fried, the exchange’s founder, to step down so that a new chief executive, John Jay Ray III, a specialist in corporate turnarounds, could lead the company. When Mr. Ray needed lawyers to manage the bankruptcy, a lucrative assignment, he asked a judge to appoint the same ones who had helped get him the job: Sullivan & Cromwell.

Now, with Mr. Bankman-Fried set to go on trial next month on fraud charges stemming from FTX’s failure, Sullivan & Cromwell’s tangled history with the exchange is drawing scrutiny — especially from Mr. Bankman-Fried’s lawyers and family.

For months, Mr. Bankman-Fried has attacked Sullivan & Cromwell in court papers and on social media, arguing that the firm’s lawyers set him up as the fall guy for FTX’s implosion while downplaying their

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September 24, 2023 by ATTORNEY

FTX bankruptcy ‘on track to be very expensive’ as fees top $200mn

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Lawyers, advisers and other professionals working on the FTX bankruptcy have racked up $200mn in fees as they attempt to restructure the “smouldering heap of wreckage” left behind by the cryptocurrency exchange’s collapse in November, an independent auditor found.

In a 47-page filing on Tuesday, a court-appointed fee examiner said she believed the amounts invoiced by hundreds of lawyers from firms including Sullivan & Cromwell and Quinn Emanuel Urquhart & Sullivan, alongside other financial and tax advisers, were not “wholly unreasonable”.

“FTX is hardly the first business organisation felled by a knave,” Katherine Stadler wrote, in an apparent reference to the company’s founder Sam Bankman-Fried, who was charged by federal prosecutors last December over his exchange’s spectacular implosion.

“What makes these cases extraordinary, however, is the largely unregulated financial system in which the debtors (and other similar financial technology companies) operate, combined with their global scope, the complete absence of corporate records, and the non-existence of even the most basic corporate governance,” she added.

Stadler’s report, which focused on the fees requested for the first 90

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June 25, 2023 by ATTORNEY

FTX bankruptcy fees near $20 million for 51 days of work

The FTX logo on a laptop screen.

Andrey Rudakov | Bloomberg via Getty Images

FTX’s top bankruptcy, legal and financial advisors have billed the company more than $19.6 million in fees for work done in 2022, according to Tuesday bankruptcy court filings. More than $10 million of that was for work done in November 2022 as Sam Bankman-Fried’s crypto empire entered bankruptcy protection in Delaware.

The firms will initially only be paid a little over $15.5 million, or 80% of the value of their work, under a court-ordered interim compensation plan.

The law firms that billed FTX are Sullivan & Cromwell, Landis Rath & Cobb, and Quinn Emanuel Urquhart & Sullivan. Professional advisor Alvarez & Marsal and financial advisor AlixPartners also billed the company.

Some of the work the firms billed for involved taking meetings with other companies that also were billing FTX for their time or corresponding with former and current executives, including Caroline Ellison, the former CEO of Bankman-Fried’s hedge fund, Alameda Research.

Landis Rath & Cobb and Sullivan & Cromwell, FTX’s primary legal firms, billed the company a combined $10.7 million for more than 8,400 hours of work. Landis Rath & Cobb billed $1.16 million for work

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February 10, 2023 by ATTORNEY

FTX lawyers to reap millions from the bankruptcy case: Report

According to a new report, the controversial law firm Sullivan & Cromwell is on track to reap a fortune from its work on the FTX cryptocurrency exchange’s bankruptcy case.

Sullivan & Cromwell’s costs in the FTX case are estimated to reach hundreds of millions of dollars before the firm’s bankruptcy investigation is over, Bloomberg Law reported on Jan. 27.

As the FTX trial is scheduled for October 2023, the firm’s lawyers now have about eight months to untangle the complicated FTX case, which will cost a lot of time and money. Sullivan & Cromwell has more than 150 people working on the FTX case, including 30 partners with rates exceeding 2,000 per hour. The report notes that associates are charging up to about $1,500 per hour, citing a court filing.

Source: Bloomberg Law

In a court declaration, Sullivan & Cromwell said that its proposed fees are in accordance with market rates by other leading law firms and actually represent a discount from the rates used in non-bankruptcy matters.

Bankruptcy experts have been facing a high demand as the crypto winter of 2022 generated many bankruptcy filings, including those by major crypto firms like Genesis Global Trading, Celsius Network and

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February 5, 2023 by ATTORNEY

FTX Has Recovered ‘Over $5B’ in Assets, Bankruptcy Attorney Says

Crypto exchange FTX has recovered more than $5 billion in different assets, not including another $425 million in crypto held by the Securities Commission of the Bahamas, a bankruptcy attorney said during a hearing Wednesday.

There’s still a sum missing in what is owed to customers and the amount is still unclear, the attorney said.

“We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value. [It] just does not ascribe any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token,” said Landis Rath & Cobb attorney Adam Landis on FTX’s behalf.

The announcement substantially raises the total FTX claims it holds, after the company’s new leadership said it could only find just over $1 billion on Dec. 20, 2022. The total amount FTX owes its creditors is still unclear. In initial bankruptcy filings, the company’s management checked off the box indicating a figure between $1 billion and $10 billion.

Sam Bankman-Fried instructed his lieutenant, Gary Wang, to create a “backdoor” for Alameda to borrow from

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January 30, 2023 by ATTORNEY
December 2023
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