The law firms, investment banks and consulting companies working with FTX on its bankruptcy case billed the crypto exchange a combined $34.18 million in January, court documents reveal.
FTX’s chief restructuring officer and new CEO, John J. Ray III, also received a hefty pay package, charging $1,300 an hour to a total of $305,000 in February according to a Mar. 6 filing.
Fee breakdown of FTX CEO John J. Ray III over the month of February. Source: Kroll
Separate court filings on Mar. 6 show United States law firms Sullivan & Cromwell, Quinn Emmanuel Urquhart & Sullivan and Landis Rath & Cobb invoiced $16.9 million, $1.44 million and $684,000 respectively for their services and expenses in January.
Lawyers and staff of Sullivan & Cromwell billed a total of 14,569 hours for their work, which equates to over 600 days. Some partners received up to $2,165 per hour while the firm’s paralegals and legal analysts were making do with between $425-$595 per hour.
The highest-priced billables were discovery ($3.5 million), asset disposition ($2.2 million) and general investigation work ($2 million).
Sullivan & Cromwell’s fee statement as counsel to FTX Trading for the month of January. Source: Kroll
It submitted another hefty $7.5 million bill to FTX for the first 19 days of February.
Ray played a crucial role in keeping Sullivan & Cromwell on board as legal counsel, having filed a court motion on Jan. 17 arguing that Sullivan & Cromwell had been integral in taking control over the “dumpster fire” that was handed to him.
His filing came in response to an objection to the retention of the law firm on Jan. 14 by U.S. Trustee Andrew Vara, who claimed that Sullivan & Cromwell had failed to sufficiently disclose its connections and prior work for FTX.
FTX’s special counsel Landis Rath & Cobb spent much of its working hours attending court hearings and litigation procedures. For its efforts, the firm billed the FTX administrators $684,000 including expenses.
Between the three law firms, over 180 lawyers and over 50 non-lawyer staff worked on the case, most of who came from Sullivan & Cromwell.
Forensics consulting firm AlixPartners billed $2.1 million for January. Almost half of the firm’s hours were spent on forensic analysis of decentralized finance (DeFi) products and tokens in FTX’s possession.
Consulting firm Alvarez & Marsal invoiced for $12.5 million for over 17,100 hours it committed to avoidance actions, financial analysis and accounting procedures.
A breakdown of Alvarez & Marsal’s monthly fee statement by project, hours and fees for the month of January: Source: Kroll
Related: Breaking down FTX’s bankruptcy: How it differs from other Chapter 11 cases
Investment bank Perella Weinberg Partners billed a monthly service fee of $450,000 plus more than $50,000 in expenses for planning a restructuring strategy and engaging in correspondence with third parties.
With FTX’s trial set for October, there are at least another six months of legal work to do for the law firms involved. Recent reports have estimated that the fees could reach in the hundreds of millions by the time the case is over, which could potentially rival the $440 million in fees that New York-based law firm Weil Gotshal made from the infamous Lehman Brothers bankruptcy in 2008.