In the three months ended Oct. 31, now-defunct cryptocurrency exchange FTX has been grappling with significant legal costs, including depleting about $53,000 per hour on bankruptcy lawyers and advisors.
The latest claims filings, conducted from Dec. 5 to Dec. 16, laid bare the financial burden, revealing that bankruptcy lawyers amassed a whopping $118.1 million between Aug. 1 and Oct. 31.
This spending translates to a daily outflow of $1.3 million over 92 days, or a burn rate of $53,300 per hour.
The lion’s share of this financial burden fell on management consulting firm Alvarez and Marshall, which submitted a bill of $35.8 million for services over a three-month period.
Close behind was global law firm Sullivan & Cromwell, which billed $31.8 million, at an average of $1,230 per hour.
Contribution to increased costs
Global consulting firm AlixPartners contributed to the cost increase by billing $13.3 million for professional services related to forensic investigations.
Quinn Emanuel Urquhart & Sullivan was added to the tally at a cost of $10.4 million.
Several smaller advisory firms billed a total of more than $26.8 million.
FTX Creditors
Insights from an anonymous FTX creditor posted to
In contrast, a December 5 report by court-appointed fee examiner Katherine Stadler sounded the alarm, identifying “significant concerns” in claims submitted by large advisory firms.
This includes Sullivan & Cromwell, Alvarez & Marshall and others for the period from May 1 to June 31.
As stated in the report:
“Fee inspectors identified a variety of technical and procedural deficiencies related to clearly overburdened staffing, clearly excessive meeting attendance, fees related to off-hours travel time, and some time entries (including vague and lumped entries).”