The creditors of the FTX exchange have noticed that the costs of legal support of the FTX Group bankruptcy procedure exceed the total amount of the cryptocurrency platform's debt to its investors. Since the beginning of the case, FTX has already paid more than $1.45 billion to law firms, according to data on applications for compensation. The fees to be paid to bankruptcy specialists exceed $1.42 billion, the amount owed by FTX to its clients.
"The commissions that various legal advisers receive in the FTX bankruptcy case amount to about $50 million per month. At the same time, it is claimed that hundreds of lawyers, financial consultants and bankers are working on this almost around the clock. Every dollar spent on this, in fact, goes out of the pockets of FTX creditors," warns Chris Hansen, a lawyer representing creditors from Paul Hastings.
During the three months of the FTX interim administration, the consulting firm Alvarez and Marshall received $36 million, Sullivan & Cromwell - $32 million, Alixpartners experts demanded $13.3 million for forensic examination, and Quinn Emanuel Urquhart received $10.4 million in fees.
According to available data, from August 1 to October 31, 2023, various law firms involved in the FTX bankruptcy case received at least $118.1 million in compensation for legal costs. Thus, the volume of the bankruptcy estate, which must be distributed among the affected creditors of the exchange, is decreasing at a rate of $53,300 per hour, as noted in the report of a judicial expert and an official representative of the Delaware bankruptcy court, Katherine Stadler.
Recently, the FTX interim administration presented a new refund offer to customers and creditors. The FTX payment plan includes the issuance of cash compensation after the liquidation of most of the assets stored in cryptocurrency.
