According to a brand new report, the controversial legislation agency Sullivan & Cromwell is on observe to reap a fortune from its work on the FTX cryptocurrency trade’s chapter case.
Sullivan & Cromwell’s prices within the FTX case are estimated to succeed in tons of of tens of millions of {dollars} earlier than the agency’s chapter investigation is over, Bloomberg Legislation reported on Jan. 27.
Because the FTX trial is scheduled for October 2023, the agency’s attorneys now have about eight months to untangle the difficult FTX case, which can price a whole lot of money and time. Sullivan & Cromwell has greater than 150 individuals engaged on the FTX case, together with 30 companions with charges exceeding 2,000 per hour. The report notes that associates are charging as much as about $1,500 per hour, citing a courtroom submitting.
In a courtroom declaration, Sullivan & Cromwell stated that its proposed charges are in accordance with market charges by different main legislation corporations and really signify a reduction from the charges utilized in non-bankruptcy issues.
Chapter consultants have been dealing with a excessive demand because the crypto winter of 2022 generated many chapter filings, together with these by main crypto corporations like Genesis World Buying and selling, Celsius Community and Voyager Digital.
Based on Jonathan Lipson, a Temple College legislation professor, attorneys are going to do very effectively in circumstances like FTX, “simply because the professionals have performed very effectively in different massive circumstances.” For instance, New York-based legislation agency Weil Gotshal made about $500 million in charges from the chapter of Lehman Brothers in 2008.
Lipson stated that such massive bills could be justified as Sullivan & Cromwell can doubtlessly assist investigators get better cash from FTX, stating:
“The vital query isn’t are the attorneys charging lots. It’s, is it value it? If they will get better some huge cash, then it’s most likely value it.”
The information comes shortly after FTX chapter decide John T. Dorsey on Jan. 19 accepted Sullivan & Cromwell’s retention as FTX’s authorized crew regardless of controversy in regards to the agency allegedly having potential conflicts of curiosity within the case.
Excellent news for Sullivan & Cromwell. The FTX Chapter Choose simply accepted their retention amid scathing allegations by a former FTX Chief Regulatory Officer. No continuance to analyze however the Choose’s choice made sense and S&C’s arguments have been compelling/very well-presented. pic.twitter.com/ZSVZdGyvkw
— John Reed Stark (@JohnReedStark) January 20, 2023
The choice got here regardless of considerations associated to Sullivan & Cromwell having suggested FTX since earlier than it filed for Chapter 11 safety in November 2022. On Jan. 9, United States senators John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis referred to as on the decide to approve a movement to nominate an unbiased examiner into FTX’s actions.
Associated: SBF says Sullivan & Cromwell contradicted itself with insolvency claims
Sullivan & Cromwell subsequently emphasised that the legislation agency has “by no means served as major exterior counsel to any FTX entity” and had a “restricted and largely transactional relationship with FTX and sure associates previous to the chapter.”
The agency didn’t instantly reply to comply with up questions from Cointelegraph.