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FTX’s Financial Struggles: Accumulating $53,000 Per Hour in Bankruptcy Fees

FTX Financial Turbulence

In the three-month period concluding on 31 October, FTX, the now-defunct crypto exchange, has been grappling with substantial legal expenses, depleting about $53,000 per hour on bankruptcy lawyers and advisers.

The latest compensation filings, covering 5 December to 16 December, lay bare the financial strain, revealing that bankruptcy lawyers accumulated a staggering $118.1 million between 1 August and 31 October.

This expenditure translates to a daily outflow of $1.3 million or an hourly burn rate of $53,300 over the course of 92 days.

The largest share of this financial burden falls on management consulting firm Alvarez and Marshall, which submitted a bill of $35.8 million for its services during the three months.

FTXs Financial Struggles Accumulating 53000 Per Hour in Bankruptcy Fees

Following closely is the global law firm Sullivan & Cromwell, which charged $31.8 million, averaging an hourly rate of $1,230.

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Contributions to the Escalating Costs

AlixPartners, a global consulting firm, contributed to the escalating costs, invoicing $13.3 million for professional services related to forensic investigations.

Quinn Emanuel Urquhart & Sullivan added to the tally with a charge of $10.4 million.

Several smaller advisory firms collectively billed over $26.8 million.

FTX Creditor

A pseudonymous FTX creditor’s insights, shared in a 17 December post on X (formerly known as Twitter), suggest that the total legal fees is fully paid since the onset of the FTX bankruptcy case amount to approximately $350 million.

In contrast, a 5 December report from court-appointed fee examiner Katherine Stadler raised alarm bells, identifying “significant areas of concern” with billings submitted by larger advisory firms.

This includes Sullivan & Cromwell and Alvarez & Marshall, among others, during the period from 1 May to 31 June.

As stated in the report:

“The Fee Examiner identified apparently top-heavy staffing, apparently excessive meeting attendance, fees related to non-working travel time, and various technical and procedural deficiencies with respect to some time entries (including vague and lumped entries),”

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive.