- FTX has lost $53K per hour on bankruptcy fees, totalling over $118 million between August and October.
- The largest bill came from Alvarez and Marshall, charging $35.8 million, followed by Sullivan & Cromwell with $31.8 million.
- Concerns have been raised about billings by larger advisory firms, including issues such as top-heavy staffing and procedural deficiencies.
Defunct cryptocurrency exchange FTX has been facing significant financial challenges as it continues to incur astronomical legal and advisory fees, according to recent compensation filings.
Between August and October, the exchange burned through approximately $53,000 every hour, accumulating over $118 million in fees during that period. This staggering amount translates to roughly $1.3 million per day.
The bankruptcy case has incurred substantial charges from various experts and firms providing services to FTX. The management consulting firm Alvarez and Marshall submitted the largest bill, charging $35.8 million for their three months of services. Following closely behind, global law firm Sullivan & Cromwell billed $31.8 million, with an average hourly rate of $1,230.
Other notable firms also added to the mounting fees. AlixPartners, a global consulting firm specialising in forensic investigations, charged $13.3 million during this period. Quinn Emanuel Urquhart & Sullivan, another law firm, billed $10.4 million. Additionally, smaller advisory firms contributed over $26.8 million in fees, further adding to the substantial costs.
According to a pseudonymous FTX creditor, approximately $350 million has already been fully paid in legal fees since the bankruptcy case began. Estimates indicate that an additional $1.45 billion in professional fees remains, bringing the total to an astonishing $1.8 billion. Such high fees are not uncommon in lengthy bankruptcy cases that involve complex legal processes.
However, concerns have been raised about the billings submitted by larger advisory firms.
A report filed by the court-appointed fee examiner, Katherine Stadler, on December 5 identified “significant areas of concern.”
These concerns include top-heavy staffing, excessive meeting attendance, fees related to non-working travel time, and various technical and procedural deficiencies in time entries.
No Comment! Be the first one.