FTX’s Bankruptcy Fees Already Topped $200M, Court Examiner Says

The wind-up of crypto speech FTX is acceptable to beryllium “very costly by immoderate measure” with nonrecreational fees already amounting to implicit $200 million, a court-appointed examiner said successful a filing made connected Tuesday.

Katherine Stadler, a bankruptcy lawyer appointed successful March to cheque fees, said lawyers and different professionals had already racked up astir 35,000 billable hours, equivalent to 4 coagulated person-years of work, by the extremity of January.

“These proceedings look connected way to beryllium precise costly by immoderate measure,” said Stadler, citing costs that already magnitude to 2% of property assets and 10% of reported cash, with 46 of the 242 attorneys assigned to the lawsuit charged implicit $2,000 an hour.

"What makes these cases extraordinary… is the mostly unregulated fiscal strategy successful which the Debtors (and different akin fiscal exertion companies) operate,” she said, citing the “nonexistence of adjacent the astir basal firm governance” astatine Sam Bankman-Fried’s exchange, a statement which echoes disapproval leveled by caller CEO John J Ray III.

“Very fewer firms could person accomplished what these professionals accomplished successful 90 days…transforming a smoldering heap of wreckage into a functioning Chapter 11 debtor-in-possession,” Stadler said, describing the play instantly pursuing the declaration of bankruptcy arsenic “an ‘all hands connected deck’ crisis.”

While broadly content, Stadler called for immoderate of the fees to beryllium slashed, and she asked pb counsel Sullivan & Cromwell to trim its $42 cardinal measure by immoderate $650,000, for deficiencies specified arsenic overstaffing, excessive meetings and vague paperwork.

Ray has been attempting to settee the exchange’s affairs since it collapsed successful November, and immoderate of his filings hint astatine an effort to reboot operations arsenic FTX 2.0. A bid by the U.S. authorities to a much wide autarkic analyse probe FTX’s downfall has been referred to the Court of Appeals.