Filings submitted by FTX’s advisors last week show a substantial amount of fees raked up by the exchange over the three-month period ending 30 April.
Data compiled by The Block’s Greg Lim indicated that the exchange owed its lawyers and restructuring advisors a total of $121.8 million in fees.
Lawyers at Sullivan & Cromwell accounted for 30.9% of all fees and expenses over the period, which amounted to $37.6 million. Restructuring consultants Alvarez and Marsel came in a close second, charging $37 million while also billing for expenses that included thousands of dollars worth of meals and lodging.
“As restructuring advisors, their claims and compensation sit on top of other claims and are ‘super senior’ to the unsecured claims bucket which includes customer deposits,” Lim noted.
In his own analysis of FTX’s professional fees accrued to date, Twitter user Mr. Purple noted that fees in March peaked at $1.6 million per day.
FTX Professional Fees
This continues to be an extremely expensive case and the Estate has been petitioned for nearly $225mm over 5.5 months (with a couple small stragglers remaining).
March fees peaked at $1.6mm PER DAY!
Fortunately, April is trending positively downward. pic.twitter.com/eMTJC3R9Xr
— Mr. Purple 🛡️ (@MrPurple_DJ) June 14, 2023
The bankruptcy is quickly becoming one of the most expensive cases relative to the value of claims, despite the exchange being operational for just three years.
One FTX creditor noted on Twitter that the $228 million cost of the exchange’s bankruptcy so far exceeds other crypto firms going through their own bankruptcy proceedings, including Celsius, BlockFi and Voyager.
“John Ray (FTX) is paid to turn over every rock with no regard to cost benefit analysis. Some rocks are not worth turning over when you bill at $1,000+/ hr. The Trustees are fiduciaries and are incentivized to chase nothings,” commented Lumida Wealth CEO Ram Ahluwalia.