FTX Lawyers Sullivan & Cromwell Bill $7.5M for First 19 Day's Bankruptcy Work
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Law firm Sullivan & Cromwell billed $7.5 million for work on the FTX bankruptcy case in November, a period covering just 19 days, a Tuesday court filing shows.
The firm – whose appointment raised qualms from U.S. lawmakers as well as the Department of Justice, the U.S. Trustee involved in the FTX bankruptcy and even FTX founder Sam Bankman-Fried – had more than 150 staffers working on filings, investigating hacks and reestablishing corporate governance arrangements for a network of over 100 entities.
“The services performed by S&C during the Fee Period represent one of the most complicated, multi-disciplinary exercises by any law firm in any area of law,” said the filing, which covers fees and expenses from Nov. 12 to Nov. 30.
A total of over 6,500 hours were worked by 32 partners, 85 associates and 34 nonlegal staff, the filing said. Hourly rates are as high as $2,165. The company said charges for senior staff already represent a discount, and the firm is seeking payment of only 80% of a $9.5 million total.
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Bankman-Fried, a bipartisan group of senators, and the U.S. Trustee are among those who have raised conflict-of-interest concerns about the firm’s involvement. (The U.S. Trustee is a branch of the Department of Justice dealing with bankruptcy matters). They cited the fact that S&C did $8.5 million of work for the company in the 16 months prior to bankruptcy, and that its former partner Ryne Miller is now FTX general counsel.
John J. Ray III, who took over as chief executive officer on Nov. 11, has said S&C is a “one of the leading law firms in the world” in relevant areas and that retaining it is in the best interest of FTX and its stakeholders.
The fee statement shows the drain that bankruptcy proceedings will represent on the estate of the corporate group as it seeks to reorganize and restore funds to creditors. That may prove especially complicated and costly if allegations concerning poor governance and weak cybersecurity controls under Bankman-Fried are true.
Later Wednesday, bankruptcy Judge John Dorsey will decide whether to appoint an independent examiner for the case, which FTX has warned could cost as much as $100 million and duplicate Sullivan & Cromwell’s work.
A spokesperson for S&C did not immediately respond to a request for comment.
Read more: Independent FTX Examiner Could Cost Crypto Exchange $100M, Court Told