Law Firm Charges $7.5M For 19 Days Of FTX Bankruptcy Work: How Did That Happen?

Law firm Sullivan & Cromwell has charged $7.5 million for their services in the FTX bankruptcy case during a 19-day period in November 2022, according to a recent court filing.

This prompted a reaction from various parties including U.S. lawmakers, the executive branch, FTX founder Sam Bankman-Fried and a group of senators. The concern stems from the firm's previous involvement with the company, as well as the fact that a former partner at Sullivan & Cromwell is now FTX's General Counsel.

The firm's work involved over 150 staff and over 6,500 hours of work by 32 partners, 85 associates, and 34 non-legal staff.

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John J. Ray III, the CEO of FTX, defended the decision to appoint Sullivan & Cromwell, citing that the firm is a leader in the pertinent areas, and that the appointment was in the best interest of FTX and all its stakeholders.

The law firm's fees highlight the cost of the bankruptcy proceedings, which may prove to be complicated and costly, particularly in light of allegations of poor governance and weak cybersecurity controls.

The bankruptcy judge, John Dorsey, will decide on Wednesday whether to appoint an independent examiner for the case, which may see expenses costing up to $100 million.

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