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<\/p>\nControversial law firm Sullivan & Cromwell is on track to reap a fortune from its work on the bankruptcy case of the FTX cryptocurrency exchange, according to a new report.<\/p>\n
Sullivan & Cromwell\u2019s costs in the FTX case are estimated to reach hundreds of millions of dollars before the firm\u2019s bankruptcy investigation is over, Bloomberg Law reported on Jan. 27. <\/p>\n
As the FTX trial is scheduled for October 2023, the firm\u2019s lawyers now have about eight months to untangle the complicated FTX case, which will cost a lot of time and money. Sullivan & Cromwell has more than 150 people working on the FTX case, including 30 partners with rates exceeding 2,000 per hour. Associates are charging up to about $1,500 per hour, the report notes, citing a court filing.<\/p>\n
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In a court declaration, Sullivan & Cromwell said that its proposed fees are in accordance with market rates by other leading law firms and actually represent a discount from the rates used in non-bankruptcy matters.<\/p>\n
Bankruptcy experts have been facing a high demand as the crypto winter of 2022 generated a big number of bankruptcy filings, including those by major crypto firms like Genesis, Celsius Network and Voyager Digital.<\/p>\n
According to Jonathan Lipson, a Temple University law professor, lawyers are going to do very well in cases like FTX, \u201cjust as the professionals have done very well in other big cases.\u201d For example, New York-based law firm Weil Gotshal made about $500 million in fees from the bankruptcy of Lehman Brothers in 2008.<\/p>\n
Lipson said that such big expenses can be justified as Sullivan & Cromwell can potentially help investigators recover money from FTX, stating:<\/p>\n
\u201cThe important question is never are the lawyers charging a lot; it\u2019s is it worth it? If they can recover a lot of money, then it\u2019s probably worth it.\u201d<\/p><\/blockquote>\n
The news comes shortly after FTX bankruptcy judge John T. Dorsey on Jan. 19 approved Sullivan & Cromwell\u2019s retention as FTX\u2019s legal team despite controversy about the firm allegedly having potential conflicts of interest in the case.<\/p>\n
The decision came despite concerns related to Sullivan & Cromwell having advised FTX since before it filed for Chapter 11 protection in November. On Jan. 9, United States senators John Hickenlooper, Thom Tillis, Elizabeth Warren and Cynthia Lummis called on the judge to approve a motion to appoint an independent examiner into FTX\u2019s activities.\u00a0<\/p>\n