FTX’s bankruptcy costs are nearing $1 billion, making it one of the most expensive Chapter 11 cases in US history.
Court records show that approximately $948 million has been paid to legal and financial companies working on the case, with fees approved so far more than $952 million. Despite the large costs, most customers are expected to recover 118% of their bills, according to Bloomberg.
The high fees stem from efforts to recover billions of dollars in assets spread across the web of complex accounts. Attorneys and financial advisors play a key role in this process, with hedge funds that have purchased FTX claims at a sudden discount among beneficiaries.
FTX began its initial allocation to creditors last week, but the legal team continues to track additional assets.
You might like it too: Folding has purchased another 10 bitcoins and holds over 1,000 people at the Ministry of Finance
Sullivan & Cromwell
According to Bloomberg, FTX’s lead law firm Sullivan & Cromwell has been paid over $248 million, while Financial Adviser Alvarez & Marsal has received approximately $306 million. The company overseeing customer claims and other creditor issues has charged about $110 million.
Sullivan & Cromwell played a key role in guiding the US Treasury and major financial institutions during the 2008 financial crisis. The company helped JPMorgan Chase acquire Bear Stearns and bail out the government of AIG.
Additionally, the company provided legal and financial attorneys in the aftermath of Enron Bankruptcy, one of the most important corporate fraud cases in history.
The cost of the FTX case far exceeds the costs of other cryptocurrency bankruptcies, including Celsius, Genesis, Blockfi and Voyager Digital, and together they cost around $505 million.
Bankruptcy continues to face ongoing litigation, including a lawsuit against Vinance seeking $1.8 billion.
According to Bloomberg, FTX costs are huge, but well below the cost of Lehman Brothers’ $6 billion bankruptcy.
You might like it too: Cryptocrime: Chinese man killed in South Korea during crypto trade
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.