FTX logo on laptop screen.
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FTX’s top bankruptcy, legal and financial advisors billed the company more than $19.6 million for work performed in 2022, according to bankruptcy court filings Tuesday. More than $10 million of that was for work done in November 2022, when Sam Bankman-Fried’s crypto empire entered bankruptcy protection in the state of Delaware.
The companies will initially be paid just over $15.5 million, or 80% of the value of their work, under a court-ordered interim compensation plan.
The law firms that billed FTX are Sullivan & Cromwell, Landis Rath & Cobb and Quinn Emanuel Urquhart & Sullivan. Professional advisor Alvarez & Marsal and financial advisor AlixPartners also billed the company.
Some of the work the firms billed for included meetings with other firms that also billed FTX during their time, or involved correspondence with former and current executives, including Caroline Ellison, former CEO of hedge fund Bankman-Fried Alameda Research.
Landis Rath & Cobb and Sullivan & Cromwell, FTX’s primary law firms, billed the company $10.7 million for more than 8,400 hours of work. Landis Rath & Cobb billed $1.16 million for work performed between Nov. 11 and Nov. 30.
Sullivan & Cromwell, targeted by both lawmakers and Bankman-Fried because of their previous work with FTX, sought more than $9.5 million in compensation for more than 6,500 billable hours between Nov. 12 and Nov. 30. More than a third of those billable hours, totaling more than $4.8 million, were for the work of partners who typically charge the highest hourly rate.
According to the filing, Sullivan & Cromwell appointed more than two dozen partners to participate in the FTX case. Jim Bromley, a partner at Sullivan & Cromwell and the lead attorney on the case, billed 178 hours between Nov. 12 and Nov. 30.
The court documents offer a glimpse into the frantic work being done by consultants to untangle FTX’s complex web of accounts and messy accounting standards. Sullivan & Cromwell lawyers spent more than 1,900 hours in November alone on work related to the analysis and recovery of FTX’s global asset base, according to the filings.
Alvarez & Marsal, a consulting firm, billed $1.9 million for more than 2,300 hours of work on “business operations,” meetings with lawyers, FTX executives, analyzing FTX holdings with blockchain researchers and reviewing “cyber security scenarios.” Those operations included hours of texting and calling Ellison in November, 5.3 hours in one day to image files on iPads and other electronic devices, and a 2.5-hour conference call on the first day of the hearing.
Quinn Emanuel, which billed more than $1.5 million for work done between November and December, appointed more than a dozen attorneys to the case, nine of whom were partners. One of those partners, Sacha Rand, bid more than $13,000 in one day of work in November, texting and handling the first day’s questions. Another attorney for Quinn filed for more than $17,000 for the one-day trip that began on November 21 and returned on November 22.
Financial consulting firm AlixPartners billed $1.1 million for work done in just over a month, from Nov. 28 to Dec. 31.
FTX advisors are not yet eligible for full remuneration. Under the interim compensation order, professional consultants are paid 80% of their claimed fees, subject to no objections. Full reimbursement for legal and consulting fees will not occur until a final application for payment is made, unless the FTX bankruptcy saga is concluded.
However, this does not mean that advisers will not get their due. A 2019 Federal Reserve study said professional and advisory fees in the Lehman Brothers bankruptcy totaled more than $2.56 billion.
Lawyers at Sullivan & Cromwell did $40,000 worth of work just to appear at FTX’s first bankruptcy hearing on Nov. 22 based on court documents about hours billed and hourly rates.