According to a brand new report, the controversial regulation agency Sullivan & Cromwell is on observe to reap a fortune from its work on the FTX cryptocurrency change’s chapter case.
Sullivan & Cromwell’s prices within the FTX case are estimated to succeed in lots of of thousands and thousands of {dollars} earlier than the agency’s chapter investigation is over, Bloomberg Legislation reported on Jan. 27.
Because the FTX trial is scheduled for October 2023, the agency’s legal professionals now have about eight months to untangle the sophisticated FTX case, which is able to price lots of money and time. Sullivan & Cromwell has greater than 150 individuals engaged on the FTX case, together with 30 companions with charges exceeding 2,000 per hour. The report notes that associates are charging as much as about $1,500 per hour, citing a courtroom submitting.
In a courtroom declaration, Sullivan & Cromwell mentioned that its proposed charges are in accordance with market charges by different main regulation corporations and really symbolize a reduction from the charges utilized in non-bankruptcy issues.
Chapter consultants have been going through a excessive demand because the crypto winter of 2022 generated many chapter filings, together with these by main crypto corporations like Genesis World Buying and selling, Celsius Community and Voyager Digital.
In line with Jonathan Lipson, a Temple College regulation professor, legal professionals are going to do very properly in instances like FTX, “simply because the professionals have carried out very properly in different large instances.” For instance, New York-based regulation agency Weil Gotshal made about $500 million in charges from the chapter of Lehman Brothers in 2008.
Lipson mentioned that such large bills could be justified as Sullivan & Cromwell can probably assist investigators recuperate cash from FTX, stating:
“The necessary query is rarely are the legal professionals charging loads. It’s, is it value it? If they’ll recuperate some huge cash, then it’s most likely value it.”
The information comes shortly after FTX chapter choose John T. Dorsey on Jan. 19 authorized Sullivan & Cromwell’s retention as FTX’s authorized workforce regardless of controversy concerning the agency allegedly having potential conflicts of curiosity within the case.
Excellent news for Sullivan & Cromwell. The FTX Chapter Choose simply authorized their retention amid scathing allegations by a former FTX Chief Regulatory Officer. No continuance to research however the Choose’s choice made sense and S&C’s arguments had been compelling/very well-presented. pic.twitter.com/ZSVZdGyvkw
— John Reed Stark (@JohnReedStark) January 20, 2023
The choice got here regardless of issues associated to Sullivan & Cromwell having suggested FTX since earlier than it filed for Chapter 11 safety in November 2022. On Jan. 9, United States senators John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis referred to as on the choose to approve a movement to nominate an unbiased examiner into FTX’s actions.
Associated: SBF says Sullivan & Cromwell contradicted itself with insolvency claims
Sullivan & Cromwell subsequently emphasised that the regulation agency has “by no means served as main outdoors counsel to any FTX entity” and had a “restricted and largely transactional relationship with FTX and sure associates previous to the chapter.”
The agency didn’t instantly reply to observe up questions from Cointelegraph.