FTX, the bankrupt cryptocurrency exchange, has faced substantial legal and advisory fees, with a staggering $118.1 million billed between August 1 and October 31. This averages to $1.3 million per day or $53,300 per hour during the 92 days.
The major contributor to these costs was management consulting firm Alvarez and Marshall, charging $35.8 million, followed by global law firm Sullivan & Cromwell at $31.8 million, with an hourly rate averaging $1,230. Additionally, AlixPartners billed $13.3 million for forensic investigation services, and Quinn Emanuel Urquhart & Sullivan charged $10.4 million. Other smaller advisory firms accounted for over $26.8 million in total billings.
A pseudonymous FTX creditor reported that fully paid legal fees since the commencement of the bankruptcy case have reached approximately $350 million. However, a report filed on December 5 by the court-appointed fee examiner, Katherine Stadler, raised concerns about the billing practices of larger advisory firms, including Sullivan & Cromwell and Alvarez & Marshall.
The report identified issues such as seemingly top-heavy staffing, excessive meeting attendance, fees related to non-working travel time, and various technical and procedural deficiencies in time entries, including vague and lumped entries.
These revelations come amid ongoing bankruptcy proceedings, highlighting the substantial financial burden FTX has faced in legal and advisory fees. The exorbitant costs have sparked scrutiny, with concerns raised about the billing practices of major consulting and law firms involved in the case.
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