FTX Bankruptcy Special Counsel, Advisers Bill $38M for January

According to court documents, the army of specialists working on the FTX bankruptcy case billed a total of $38 million plus costs in January.

Sullivan & Cromwell has been retained as counsel by bankruptcy administrators. They have also hired Quinn Emmanuel Urquhart & Sullivan and Landis Rath & Cobb to serve as special counsel in the proceedings.

AlixPartners was hired as a consultant to perform forensic analysis on DeFi products and tokens in FTX‘s possession.

Meanwhile, financial services companies Alvarez & Marsal and Perella Weinberg Partners have been hired to look through FTX’s accounting records and identify which assets may be sold. Sullivan & Cromwell billed $16.8 million in January, Quinn Emanuel Urquhart & Sullivan billed $1.4 million, and Landis Rath & Cobb billed $663,995.

The three firms have over 180 lawyers assigned to the case, as well as over 50 non-lawyer staff members such as paralegals. According to court papers, Sullivan & Cromwell attorneys and personnel billed a total of 14,569 hours in January. Sullivan & Cromwell’s largest project was the discovery, followed by asset disposition, asset analysis, and asset recovery.

The United States Department of Justice initially opposed to FTX employing Sullivan & Cromwell, citing possible conflicts of interest. Sam Bankman-Fried also objected to the firm being hired by bankruptcy administrators, stating that the law firm’s personnel had coerced him into filing for bankruptcy in November. A Delaware bankruptcy court judge granted the firm permission to continue representing FTX in late January.

Once FTX filed for bankruptcy in November, Sullivan & Cromwell submitted a bill for $7.5 million in early February for the first 19 days of labor.

The bulk of Quinn Emanuel Urquhart & Sullivan’s billable time was spent on Asset Analysis and Recovery, as well as Avoidance Action – legalese for attempting to reverse specific transactions made by the debtor prior to bankruptcy.

Hearings, litigation, and asset disposal consumed a large amount of time for Landis Rath & Cobb. AlixPartners received $2.1 million in billing for 2,454 hours of labor.

Perella Weinberg Partners, an investment bank, invoiced $450,000 (its monthly fee), and court filings reveal it spent a substantial amount of time creating a restructuring plan as well as communicating with other parties.

According to the bank’s billing breakdown, it spent a significant amount of time working on the sale of FTX assets LedgerX and FTX Japan. A bankruptcy court approved the sale in January in order to generate money to repay creditors.

Alvarez & Marsal billed $12.3 million in the month, behind only Sullivan & Cromwell. It billed the most for Avoidance Actions (3,370 hours), financial analysis (1,168 hours), and accounting (1,106 hours).