Collapsed crypto exchange FTX apparently owes more to lawyers handling its bankruptcy proceedings than it does to its creditors. This is according to a flurry of recent compensation filings.
Filings dating from December 5 to December 16 appear to show that FTX has been billed around $1.45 billion by legal experts so far. This has now outstripped the just over $1.42 billion owed to out-of-pocket customers.
The filings also show that FTX has paid lawyers a total of $350 million since bankruptcy proceedings began earlier this year and that from August to October, it shelled out somewhere in the region of $1.4 million per day. That’s $118 million in total or, as calculated by Cointelegraph, $53,000 every hour.
These massive fees have been charged by a raft of legal firms, including Alvarez and Marsal LLC, which billed nearly $36 million, Sullivan & Cromwell LLP, which billed nearly $32 million, and Alixpartners LLP, which has charged FTX just over $13 million.
Fees charged to FTX have been ‘concerning’
It has also been claimed that there are “significant areas of concern” surrounding the fees being charged by the firms handling the FTX bankruptcy.
According to a report from December 5, a court-appointed fee examiner, billing from Alvarez and Marsal showed “apparently top-heavy staffing, apparently excessive meeting attendance, fees related to non-working travel time, and various technical and procedural deficiencies with respect to some time entries (including vague and lumped entries).”