February 24, 2024

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FTX Paid Crypto Bankruptcy Lawyers $12 Million for Early Work

FTX Paid Crypto Bankruptcy Lawyers $12 Million for Early Work

Bankrupt crypto exchange FTX Ltd. paid out its direct lawyers far more than $12 million to handle the earliest portions of the carefully viewed Chapter 11 situation, in accordance to a Wednesday court docket submitting.

Law business Sullivan & Cromwell acquired a $12 million retainer from an FTX-managed company soon before the exchange’s Nov. 11 bankruptcy filing, the filing exhibits. The business has drawn a little a lot more than $3 million of that, mainly for get the job done carried out in the times top up to the rushed personal bankruptcy submitting.

Quinn Emanuel is also functioning for FTX and its board of administrators as distinctive counsel in a litigation ability, hunting for lawful statements the individual bankruptcy estate could possibly be able to bring. The organization gained about $575,000 in the three months foremost up to FTX’s submitting, in accordance to a further court filing.

Landis Rath & Cobb, whose attorneys are FTX’s nearby Delaware counsel, acquired a $300,000 retainer in the 90 days foremost up the submitting.

FTX imploded in spectacular style in early November, main to the firing of co-founder Sam Bankman-Fried and a rushed Chapter 11 filing of much more than 100 FTX-linked businesses. In a signal of the hurried pace, FTX did not submit common “first-day” filings till about 10 times just after it originally went to court docket.

Prior to staying criminally billed, Bankman-Fried prepared to testify ahead of Congress that Sullivan & Cromwell was aspect of a group implementing “extreme pressure” to file for Chapter 11, according to a leaked transcript of his organized remarks.

In that testimony, Bankman-Fried was scheduled to say Sullivan & Cromwell was “one of the primary” legislation firms that represented the business. But Sullivan & Cromwell in Wednesday’s court docket filing explained it was “not primary external counsel” to any of the FTX debtors prior to the personal bankruptcy submitting.

FTX’s payments to Sullivan & Cromwell started in August but ramped up in the times prior to the Chapter 11 submitting. The business acquired about $3.1 million from Oct. 19 through Nov. 3, according to courtroom documents. Its optimum-compensated spouse, who’s not named in the doc, expenses $2,165 per hour.

Quinn Emanuel and Sullivan & Cromwell also represented FTX in other legal matters prior to the restructuring.

For non-bankruptcy function, Sullivan & Cromwell explained it experienced been given about $8.5 million in lawful service fees and expenses from FTX from July very last 12 months by means of November’s Chapter 11 filing. Those people expenses had been for “acquisition transactions and precise regulatory inquiries relating to particular U.S. business enterprise strains,” Sullivan & Cromwell claimed.

Andrew Dietderich, co-head of restructuring for Sullivan & Cromwell, is primary the staff advising FTX and filed the court docket declaration Wednesday.

Quinn Emanuel obtained $500,000 from FTX in April, the commence of an settlement that would send out the regulation company a minimum amount $100,000 cost per month, the agency claimed in a court document.

The regulation company advised FTX on intellectual residence disputes represented Alameda Exploration in blockchain and cryptocurrency disputes and encouraged FTX on restructuring information linked to the Chapter 11 scenarios of crypto exchanges Voyager Digital and Celsius Holdings.

Quinn Emanuel claimed it experienced beforehand signed an engagement letter with Bankman-Fried, but mentioned it has not executed any authorized products and services for him and he’s not at the moment a organization consumer.

A 9-member creditors committee this 7 days hired Paul Hastings to direct its function in the FTX situation.

Bankman-Fried was extradited to the US yesterday, where he faces criminal fees in Manhattan stemming from his company’s collapse. Two of his closest confidantes, Alameda Investigation CEO Caroline Ellison and FTX co-founder Gary Wang, pleaded guilty to fraud prices Wednesday and are cooperating with prosecutors in the scenario.

The situation is FTX Investing Ltd., Bankr. D. Del., 22 11068, 12/22/22.