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FTX could pay over $2,100 per hour for bankruptcy lawyers

By Dietrich Knauth and Andrew Goudsward

(Reuters) – Bankrupt crypto exchange FTX has asked a U.S. bankruptcy judge for permission to pay its top restructuring lawyers as much as $2,165 per hour, an unusually high rate for a company that cannot afford to repay all of its debts.

FTX declared bankruptcy on Nov. 11, collapsing amid a wave of customer withdrawals. Federal prosecutors have charged founder Sam Bankman-Fried with stealing billions of dollars in FTX customer assets to plug losses at his hedge fund, Alameda Research, and two of his former associates have already pleaded guilty. Bankman-Fried is scheduled to be arraigned in New York on Thursday.

New York-based law firm Sullivan & Cromwell is representing FTX in its Chapter 11 case and guiding its efforts to return assets to customers. FTX late Wednesday asked the Delaware federal judge overseeing the case for approval to pay the firm’s partners and special counsel between $1,575 and $2,165 per hour for their work.

The top lawyers’ rates far exceed the $1,300 per hour billed by FTX’s new CEO John Ray, who also filed an application with the court late Wednesday.

Court-approved billing rates for bankruptcy attorneys did not cross the $2,000-per-hour mark

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January 4, 2023 by ATTORNEY

FTX Paid Crypto Bankruptcy Lawyers $12 Million for Early Work

Bankrupt crypto exchange FTX Ltd. paid its lead lawyers more than $12 million to handle the earliest portions of the closely watched Chapter 11 case, according to a Wednesday court filing.

Law firm Sullivan & Cromwell received a $12 million retainer from an FTX-controlled company shortly before the exchange’s Nov. 11 bankruptcy filing, the filing shows. The firm has drawn a little more than $3 million of that, largely for work done in the days leading up to the rushed bankruptcy filing.

Quinn Emanuel is also working for FTX and its board of directors as special counsel in a litigation capacity, looking for legal claims the bankruptcy estate might be able to bring. The firm received about $575,000 in the three months leading up to FTX’s filing, according to another court filing.

Landis Rath & Cobb, whose lawyers are FTX’s local Delaware counsel, received a $300,000 retainer in the 90 days leading up the filing.

FTX imploded in spectacular fashion in early November, leading to the firing of co-founder Sam Bankman-Fried and a rushed Chapter 11 filing of more than 100 FTX-related companies. In a sign of the hurried pace, FTX didn’t submit typical “first-day” filings until

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December 25, 2022 by ATTORNEY

Crypto meltdown a boon for bankruptcy lawyers

Dec 2 (Reuters) – Turmoil in the cryptocurrency industry has rattled major exchanges and sent the value of digital assets tumbling, but at least one group stands to gain: bankruptcy lawyers.

High-profile bankruptcies involving crypto exchange FTX, hedge fund Three Arrows Capital and crypto lenders BlockFi, Celsius Network and Voyager Digital Ltd are generating new opportunities – and big fees – for law firms that counsel troubled companies.

Large law firms can rake in more than $100 million in legal fees during a long-running bankruptcy, experts said.

“You’ve got to pay the gravedigger,” said Adam Levitin, a law professor at Georgetown University who specializes in bankruptcy law. “These are complicated cases with a bunch of novel issues, and it shouldn’t be surprising that they are going to require a lot of attorney involvement.”

The value of bitcoin has dropped 65% so far this year, dragging down other crypto assets and leaving investors reeling. The spectacular implosion of FTX last month sent fresh shock waves through the cryptocurrency industry.

One U.S. law firm, Kirkland & Ellis, is representing BlockFi in its bankruptcy case filed on Monday and is also lead counsel for Celsius Network and Voyager Digital, which both filed

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December 4, 2022 by ATTORNEY

Three Big Law Firms Aid Amazon $3.49 Billion One Medical Buy (1)

Amazon.com Inc.‘s bid to buy One Medical and break into the US health care market is getting help from three Big Law firms.

Paul, Weiss, Rifkind, Wharton & Garrison is advising Amazon while Cooley and Ropes & Gray are representing San Francisco-based 1Life Healthcare Inc., parent of primary care company One Medical.

One Medical operates 182 medical offices in 25 markets in the US. Customers pay a subscription fee for access to doctors and 24-hour digital services. Amazon’s purchase of One Medical for $3.49 billion in cash would be the third-largest deal in the Seattle-based company’s history.

Paul Weiss corporate partners Krishna Veeraraghavan and Kyle Seifried are counseling Amazon. Paul Weiss recruited Veeraraghavan last year from Sullivan & Cromwell in a high-profile lateral move.

Steven Tonsfeldt leads the Cooley team. Cooley hired him in 2016 after the Silicon Valley dealmaker led the mergers and acquisitions practice at O’Melveny & Myers.

Other Cooley lawyers representing One Medical include corporate partners Matthew Hemington and Annie Lieberman, as well as associate Gaël Hagan.

Ropes & Gray health care partners Jennifer Romig and Christina Bergeron are working with a half-dozen associates for One Medical.

Cooley’s Tonsfeldt and Hemington and Ropes & Gray’s Romig

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July 31, 2022 by LAW
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