New Court Filings: FTX Racked Up $19.6 Million in Legal and Financial Advisor Fees in Just 51 Days – What’s Going On?

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Sam Cooling

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Sam Cooling

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Sam is a financial journalist with a focus on cryptocurrency market news, based in London. With a Master’s Degree in Development Management from the London School of Economics, Sam’s passion for...

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June 26, 2023

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Court documents have revealed the eye-watering costs behind the ongoing FTX bankruptcy saga. So far, FTX’s advisors for bankruptcy, legal, and financial matters have charged the company over $19.6 million for services rendered in the year 2022.

The grandeur of this legal circus cannot be understated. On the defense team, there are 151 staff members. This includes attorneys, accountants, and strategic advisors.

Work in the immediate aftermath of the seismic FTX implosion saw $10m billed at the end of November.

Sullivan & Cromwell formed the biggest share of the ongoing legal tab. Charging a whopping $6.28m for their 6,500 hours of work between November 12 – 30. Up to half of this bill comprised work by senior partners in the firm charging extreme rates.

The biggest single item was a $40,000 invoice for one day’s representation at the first FTX bankruptcy hearing.

Quinn Emanuel billed FTX $1.5m after deploying 12 lawyers to the case to the tune of $17,000 a day.

Legal costs reflect complexity of FTX case

The staggering legal bill comes with the immense complexity around the case. With a huge web of 100 entities to work through at a transactional level in reference to accounting compliance.

Indeed, Alvarez and Marsal’s advisory has seen 7925 hours invested in the case. This mostly comprises blockchain explorer work following the money trails. But also included interviewing key figures in the case such as Caroline Ellison (Alameda Research). A fair $6.28m invoice covered this.

Jaw-dropping legal bills are not uncommon in corporate bankruptcy cases. Lehman Brothers’ bankruptcy saga cost a sensational $2.56bn.

Yet, these fee statements show the feeding frenzy that has engulfed the case. After all, this is a saga aiming to return funds to creditors – not squeeze all the juice from the lemon.

This doesn’t seem to concern bankruptcy Judge John Dorsey. The judicature is currently considering the appointment of an independent examiner to the case. An extra cost of $100m alleges Sam Bankman-Fried.

The FTX saga continues.