law firm

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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Bankruptcy lawyer urged clients to spread COVID-19, judge says

(Reuters) – A Colorado bankruptcy judge has sanctioned an Edgewater, Colorado lawyer for “blatant misconduct,” including advice he gave former clients to try to infect the trustee overseeing their case with COVID-19 or another illness.

U.S. Bankruptcy Judge Thomas McNamara on Tuesday suspended attorney Devon Barclay from practicing in Colorado bankruptcy court for three years over his conduct while representing Matthew and Nicole Mennona, a Littleton, Colorado couple who sought Chapter 7 relief during the pandemic.

Barclay forged his clients’ signatures on their Chapter 7 petition, tried to get the bankruptcy case dismissed multiple times under “false assertions of fact,” and ignored a trustee’s discovery efforts, leading to his clients getting hit with a $2,783.50 sanction, McNamara found.

McNamara also cited a Sept. 9, 2021, email from Barclay to his clients about a letter that was intended to be sent to another lawyer. “If either of you have COVID or some other highly infectious, nasty disease — or if you know someone who does — please make sure they lick the envelope and handle it as much as possible,” Barclay said in the email.

It is unclear from the court record whether the comment was meant as a joke. Barclay

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FTX Paid Crypto Bankruptcy Lawyers $12 Million for Early Work

Bankrupt crypto exchange FTX Ltd. paid its lead lawyers more than $12 million to handle the earliest portions of the closely watched Chapter 11 case, according to a Wednesday court filing.

Law firm Sullivan & Cromwell received a $12 million retainer from an FTX-controlled company shortly before the exchange’s Nov. 11 bankruptcy filing, the filing shows. The firm has drawn a little more than $3 million of that, largely for work done in the days leading up to the rushed bankruptcy filing.

Quinn Emanuel is also working for FTX and its board of directors as special counsel in a litigation capacity, looking for legal claims the bankruptcy estate might be able to bring. The firm received about $575,000 in the three months leading up to FTX’s filing, according to another court filing.

Landis Rath & Cobb, whose lawyers are FTX’s local Delaware counsel, received a $300,000 retainer in the 90 days leading up the filing.

FTX imploded in spectacular fashion in early November, leading to the firing of co-founder Sam Bankman-Fried and a rushed Chapter 11 filing of more than 100 FTX-related companies. In a sign of the hurried pace, FTX didn’t submit typical “first-day” filings until

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Crypto meltdown a boon for U.S. bankruptcy lawyers

The value of bitcoin has dropped 65 per cent so far this year, and large law firms can rake in more than $100 million in legal fees during a long-running bankruptcy, experts say.

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Turmoil in the cryptocurrency industry has rattled major exchanges and sent the value of digital assets tumbling, but at least one group stands to gain: bankruptcy lawyers.

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High-profile bankruptcies involving crypto exchange FTX, hedge fund Three Arrows Capital and crypto lenders BlockFi, Celsius Network and Voyager Digital Ltd are generating new opportunities – and big fees – for law firms that counsel troubled companies.

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Crypto meltdown a boon for bankruptcy lawyers

Dec 2 (Reuters) – Turmoil in the cryptocurrency industry has rattled major exchanges and sent the value of digital assets tumbling, but at least one group stands to gain: bankruptcy lawyers.

High-profile bankruptcies involving crypto exchange FTX, hedge fund Three Arrows Capital and crypto lenders BlockFi, Celsius Network and Voyager Digital Ltd are generating new opportunities – and big fees – for law firms that counsel troubled companies.

Large law firms can rake in more than $100 million in legal fees during a long-running bankruptcy, experts said.

“You’ve got to pay the gravedigger,” said Adam Levitin, a law professor at Georgetown University who specializes in bankruptcy law. “These are complicated cases with a bunch of novel issues, and it shouldn’t be surprising that they are going to require a lot of attorney involvement.”

The value of bitcoin has dropped 65% so far this year, dragging down other crypto assets and leaving investors reeling. The spectacular implosion of FTX last month sent fresh shock waves through the cryptocurrency industry.

One U.S. law firm, Kirkland & Ellis, is representing BlockFi in its bankruptcy case filed on Monday and is also lead counsel for Celsius Network and Voyager Digital, which both filed

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