The fee for Sullivan & Cromwell, acting on behalf of FTX in the exchange’s bankruptcy case, is likely to reach hundreds of millions of dollars before the process concludes. Bloomberg Law.
The estimate is based on hourly rates of its specialists, ranging from $1395 to $2165, according to court documents.
Sullivan & Cromwell stressed that the proposed fee schedule is market-competitive and essentially represents a discount compared with non-bankruptcy matters.
The court is scheduled for October 2023. The firm’s lawyers will have eight months to immerse themselves in the case.
The agency pointed to heightened demand for bankruptcy experts in the wake of collapses of firms such as Genesis Capital, Celsius Network and Voyager Digital.
According to Temple University Law professor Jonathan Lipson, lawyers in similar FTX cases will ‘prosper’. He recalled Weil Gotshal’s earnings of about $500 million in fees for participating in the Lehman Brothers bankruptcy process in 2008.
The expert called the sizeable spend on Sullivan & Cromwell ‘justified’, as the firm could potentially help investigators recover money for shareholders of Sam Bankman-Fried’s group of companies.
“The important question is not how much lawyers charge, but whether it is justified? If they can recover a lot of money, then it is probably worth it”, he explained.
On January 19, the court approved keeping Sullivan & Cromwell as FTX’s legal team, despite disputes that the firm allegedly had a potential conflict of interest in the case due to advising FTX before the platform’s bankruptcy proceedings commenced.
Good news for Sullivan & Cromwell. The FTX Bankruptcy Judge just approved their retention amid scathing allegations by a former FTX Chief Regulatory Officer. No continuance to investigate but the Judge’s decision made sense and S&C’s arguments were compelling/very well-presented. pic.twitter.com/ZSVZdGyvkw
— John Reed Stark (@JohnReedStark) January 20, 2023
Earlier, FTX’s lawyers presented a detailed list of creditors of the exchange, spanning more than 100 pages. Among them were Apple, Google, Amazon, Coinbase, The New York Times and others.
Earlier, the lawyersasked the court to permit calling Bankman-Fried, his family and some former top executives as part of efforts to recover debts.
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