bankman fried

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

Texas, California, and New Jersey Join Call for Independent Examiner

A growing chorus of regulators wants an independent examiner appointed to review the financial statements, or lack thereof, in the FTX bankruptcy proceedings.

“Texas, among several other state and federal regulators, is currently investigating the Debtors and their related entities for violations in connection with their transaction of business in Texas and with Texas account holders,” wrote attorney Roma Desai on behalf of Texas Attorney General Ken Paxton.

The statement from the Texas attorney’s office follows similar motions from Wisconsin and Vermont regulators. The new court filing on Wednesday included letters of support from banking and securities officials in a handful of other states: Alaska; Arkansas; California; Florida; Hawaii; Idaho; Illinois; Kentucky; Maine, Maryland, New Hampshire, New Jersey, North Carolina, Oklahoma, Tennessee, and D.C..

If an examiner is appointed in the FTX case, it won’t be without some precedent.

Earlier this week the independent examiner who dug through bankrupt crypto lender Celsius released their 689-page report, concluding that problems at the company “dated back to at least 2020.”

The downfall of FTX

FTX and its related entities, including trading desk Alameda Research, filed for bankruptcy on November 11. Days later, newly appointed FTX CEO John Ray III,

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February 7, 2023 by ATTORNEY

FTX has recovered $5B in liquid assets, bankruptcy lawyer says

FTX investor Mark Miller discusses the fallout from FTX after losing $25,000 in the collapse.

Bankrupt cryptocurrency exchange FTX has recovered upwards of $5 billion in liquid assets, an attorney for the failed platform told a judge Wednesday.

FTX logo

The FTX Arena name is still visible where the Miami Heat basketball team plays in Miami on Nov. 12, 2022. Lawyers for FTX disclosed Wednesday that more than $5 billion in liquid assets have been recovered so far. (AP Photo/Marta Lavandier / AP Newsroom)

That figure includes cash, liquid digital assets and investments securities, the lawyer said.

FTX BUSINESS SALES DRAW OVER 100 EXPRESSIONS OF INTEREST

The revelation comes as FTX’s new leadership, led by current chief executive John J. Ray III, try to recover what they can of customers’ and investors’ funds following the firm’s collapse under previous CEO and founder Sam Bankman-Fried.

FTX CEO John Ray III testifies before the House Financial Services Committee

John Ray, CEO of FTX Cryptocurrency Derivatives Exchange, speaks during a House Financial Services Committee hearing investigating the collapse of FTX in Washington, D.C., on Dec. 13, 2022. (Al Drago/Bloomberg via Getty Images / Getty Images)

Prior to its downfall, FTX was the world’s second-largest crypto exchange and was once valued at an estimated $32 billion.

DOJ

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January 22, 2023 by ATTORNEY

FTX Fights Sullivan & Cromwell Removal Attempt From Bankruptcy

Sullivan & Cromwell’s removal or limitation as bankruptcy counsel for FTX would “severely, if not irreparably” harm customers and creditors, the cryptocurrency exchange’s CEO John Ray told a judge.

An “army” led by the firm’s lawyers have worked under Ray’s supervision around the clock for the past two-plus months, he told Delaware Bankruptcy Court Judge John T. Dorsey in a filing. The work has stopped assets from being depleted and aided federal investigations, he said.

“The advisors are not the villains,” Ray said. “This is not the time to distract and burden the debtors.”

FTX in the Tuesday filings is defending Sullivan & Cromwell’s role as its lead bankruptcy counsel after four US senators questioned the firm’s work for the crypto exchange prior to its implosion. The US Trustee has also raised concerns about whether the firm’s disclosures have been sufficient.

Sullivan & Cromwell has advised FTX since the exchange first initiated Chapter 11 proceedings in November, listing assets and liabilities of at least $10 billion. Dorsey is scheduled to weigh in on FTX’s application to keep the firm as its main bankruptcy counsel in a Friday hearing.

In a court filing on behalf of FTX, the firm said that

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January 20, 2023 by ATTORNEY

FTX could pay over $2,100 per hour for bankruptcy lawyers

By Dietrich Knauth and Andrew Goudsward

(Reuters) – Bankrupt crypto exchange FTX has asked a U.S. bankruptcy judge for permission to pay its top restructuring lawyers as much as $2,165 per hour, an unusually high rate for a company that cannot afford to repay all of its debts.

FTX declared bankruptcy on Nov. 11, collapsing amid a wave of customer withdrawals. Federal prosecutors have charged founder Sam Bankman-Fried with stealing billions of dollars in FTX customer assets to plug losses at his hedge fund, Alameda Research, and two of his former associates have already pleaded guilty. Bankman-Fried is scheduled to be arraigned in New York on Thursday.

New York-based law firm Sullivan & Cromwell is representing FTX in its Chapter 11 case and guiding its efforts to return assets to customers. FTX late Wednesday asked the Delaware federal judge overseeing the case for approval to pay the firm’s partners and special counsel between $1,575 and $2,165 per hour for their work.

The top lawyers’ rates far exceed the $1,300 per hour billed by FTX’s new CEO John Ray, who also filed an application with the court late Wednesday.

Court-approved billing rates for bankruptcy attorneys did not cross the $2,000-per-hour mark

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January 4, 2023 by ATTORNEY
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