Bankruptcy of FTX Incurs Over $200 Million in Legal Fees
Luisa Crawford Jun 21, 2023 11:12
An independent auditor has examined the legal fees incurred during the initial months of FTX's bankruptcy, revealing a staggering amount exceeding $200 million. The auditor justifies these significant fees, considering the monumental nature of the task at hand.
An independent auditor has examined the legal fees incurred during the initial months of FTX's bankruptcy, revealing a staggering amount exceeding $200 million. The auditor justifies these significant fees, considering the monumental nature of the task at hand.
Katherine Stadler, the court-appointed fee examiner, submitted a comprehensive report on June 20, analyzing the fees charged by law firms over a three-month period following FTX's bankruptcy filing on November 11. Stadler concluded that these fees were reasonably justified during this period.
Stadler emphasized the unique circumstances surrounding FTX's operations within a largely unregulated financial system. She highlighted the remarkable global scope of the case, the absence of corporate records, and the lack of basic corporate governance, making it an exceptional scenario.
Confirming that the team responsible for FTX's bankruptcy had requested more than $200 million in fees since November, Stadler praised their prompt and effective efforts in turning around what she described as a "smoldering heap of wreckage."
The breakdown of fees in Stadler's report shed light on the charges imposed by law firms during the initial weeks of FTX's Chapter 11 bankruptcy filing. It revealed that the 242 lawyers involved in the case billed hourly rates ranging from $388 to $2,165. Notably, 46 lawyers were billing at rates surpassing $2,000 per hour.
Given the complex nature of FTX's bankruptcy proceedings and the immense challenges faced by the legal team, the substantial fees incurred can be deemed justified. As the proceedings continue, there will likely be further scrutiny and evaluation of these fees.
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