The downfall of cryptocurrency exchange FTX could mean a big payday for a major New York-based law firm.
FTX submitted a request Wednesday with the bankruptcy court in Delaware to pay Sullivan & Cromwell as much as $2,165 an hour for its legal services.
FTX already has paid Sullivan and Cromwell, or S&C, about $3.4 million for legal work in the 90 days ended in early November. FTX filed for bankruptcy protection on Nov. 11.
In the request—signed by John J. Ray III, FTX’s new CEO—FTX requested that S&C partners and special counsel get a top rate of $2,165 an hour; legal associates a top rate of $1,475 an hour; and legal assistants a top rate of $595 an hour. The document says these rates were determined by looking at what other top law firms have charged in bankruptcy cases for similar work.
FTX said, given the “unusual scope and complexity” of its bankruptcy, that “it requires a lead law firm with experience in coordinating similar multi-disciplinary matters in multiple jurisdictions. The S&C team includes lawyers with personal experience coordinating matters of similar scope.”
Here is what the request states:
“S&C has agreed with the Debtors that, consistent with the above and subject to the Court’s approval, it will charge the Debtors for its legal services on an hourly basis in connection with these cases. S&C’s billing rates have been determined with reference to the rates charged by other leading law firms for similar work during chapter 11 cases and will range from $1,575 to $2,165 per hour for partners and special counsel, $810 to $1,475 per hour for associates and $425 to $595 per hour for legal assistants.”
According to the document, FTX is getting a discount off S&C’s rates for more senior “timekeepers in each class” relative to normal billing rates for “non-bankruptcy engagements.” S&C didn’t immediately respond to a request for comment.
S&C is a top New York-based firm with more than 875 lawyers on four continents.
FTX’s systems and controls have been sharply criticized by Ray in public statements, suggesting that disentangling the company’s financials and getting it ready for a possible sale will be a laborious process.
“FTX Group’s collapse appears to stem from the absolute concentration of control in the hands of a very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls that are necessary for a company that is entrusted with other people’s money or assets,” Ray said earlier this month.
Write to Andrew Bary at firstname.lastname@example.org