One industry in particular has benefited from the ongoing collapse of crypto companies following FTX: bankruptcy lawyers.
In addition to causing bankruptcies like BlockFi, a number of other well-known examples came before FTX’s demise. The most noteworthy ones include the cryptocurrency lenders Celsius Network and Voyager Digital as well as the hedge fund Three Arrows Capital.
Some law firms have been able to generate more than $100 million in fees because to these lucrative new sources of income.
Except in bankruptcy situations, legal firms often do not make their billing rates public. Attorneys for the debtor corporation must specify its rates, and a judge must then approve them. These expenses, which are deducted from the assets of a bankruptcy estate, are typically not reduced by judges.
American legal firm Kirkland & Ellis has been a key representative in a number of the lawsuits thus far. The company not only represents BlockFi but also Celsius Network and Voyager Digital as main counsel.
The company charges up to almost $2,000 per hour for its services, according to court documents. Kirkland & Ellis has accrued average monthly legal expenses of $3.3 million in each of the latter cases.
Sullivan & Cromwell, a Wall Street company, has been acting as bankruptcy counsel in the matter of FTX. The firm charged up to $1,825 per hour, according to earlier court documents, though their rates have not yet been made public.
Alameda Research, another company founded by Sam Bankman-Fried, is also represented by Sullivan & Cromwell, which also represents Celsius and Voyager’s creditors. Latham & Watkins has received the highest billing rates thus far for its work with Celsius and Three Arrows Capital. According to court documents, their highest rates have topped out at $2,075 per hour.
Just as a recent trend started to fade, these instances have given these businesses a fresh source of income. Numerous bankruptcy practices have benefited in recent years from a string of closures brought on by the coronavirus outbreak. However, another important bankruptcy has surfaced as those cases decline and crypto cases increase.
The InfoWars host and far-right broadcaster Alex Jones has filed for Chapter 11 bankruptcy in a Houston court. A jury ruled in October that Jones and InfoWars’ parent business must pay more than $1 billion in compensation to the loved ones of Sandy Hook massacre victims.
Jones had long maintained that the attack was a fabrication, and his fans had harassed the relatives of the victims.
Even though Jones has since acknowledged the massacre definitely occurred, he still uses his platform to disseminate rumors of conspiracies.
Even Elon Musk has refused to reinstate his Twitter account after changing his policy to emphasize freedom of speech because of Jones’ aggressive comments.