FTX’s bankruptcy fees costliest since Lehman Brothers

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The cost of FTX bankruptcy is approaching $ 1 billion, which enhances the collapse of the Sam Bankan Farid Corporation as Crypto Enverrise as one of the most semester 11 cases in the history of the United States.

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Nearly $ 948 million has been paid for more than ten companies that have been appointed to work on bankruptcy until January 2, and more than $ 952 million has been approved of the fees.

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Fool as it is, the expenses appear to be fruitful to obtain the coding platform creditors. Most customers are preparing to restore 118 percent of what they were entitled to, and it is a rare result in the process of Chapter 11, as the creditors usually end up obtaining penalties on the dollar.

Legal experts told Bloomberg News that beginners can thank the crowds of lawyers and financial advisors who tracked billions of dollars of digital assets and criticism scattered via a network of Byzantine accounts. Among the beneficiaries is the hedge funds that picked up the FTX customer claims, which were trading up to 10 cents on the dollar after the company's collapse. FTX, who requested protection in November 2022, said last week that it started the primary distributions of customers.

Lawyers are still moving through a number of unorganized legal entities under the FTX umbrella, looking for more assets to provide creditors. Some lawsuits related to repercussions remain great, including a complaint against Binance Holdings Ltd. You seek to get approximately $ 1.8 billion.

Court records indicate that prominent bankruptcy of Crypto Celius Network LLC and Blockfi Inc. Genesis Global and Voyager Digital Holdings Inc. It costs about $ 502 million. The continuous FTX condition is almost twice.

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Lead Law Firm, Sullivan & Cromwell LLP, was paid more than 248.6 million US dollars, and the financial advisor Alvarez was paid and was transferred about 306 million US dollars, according to court records. Advisors representing the interests of FTX and other creditors imposed a fee of approximately $ 110.3 million. It is possible that the most expensive case of Chapter 11 in the past few years, according to the data of the bankruptcy.

Professor of Harvard Law Faculty of Law, Professor Jared Elias, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, said, He who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, who studied, that the company “has disturbed that the company” has disturbed that the company be “the cost of planning a special cost payment With the FTX payment plan, which was approved in October, it will be cheaper if the company was disturbed to have books and records, but they did not.

“Such a complete failure of corporate controls and such a complete absence of reliable financial information” in 40-year profession, which includes guidance ENRON through Chapter 11. Ray Consulting Company has been paid more than $ 8 million, according to court records.

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Sullivan, Kremwell and FTX rejected the comment. Alvarez & Marsal did not respond to the comment.

Elias said that the high cost of FTX bankruptcy comes amid a steady increase in the cost of legal services and other professional services. It seems that the daily bankruptcy cost has increased significantly between 2010 and 2022, and on average, Chapter 11 fees were consumed more than the assets of the pre -bankruptcy debtor, according to the research he published this month.

Catherine Stader, a lawyer who was appointed to review FTX independently, said in the 2023 report that the case was unusual because of the “largely irregular financial system” in which the debtors (and other financial technology companies) work, “on the global scale” of the process And the lack of corporate governance.

Although the Stadler report said that the bankruptcy was on the right path to be “very expensive for any action”, the performance of the professionals was also great.

Lehman Brothers is still the most expensive case of Chapter 11 in history, which costs about $ 6 billion, according to a report issued by the Federal Reserve in New York in 2019. Bloomberg News reported that the cost of restructuring of Portoresto's public debt exceeded two billion dollars, making it the most expensive bankruptcy The municipality in the history of the United States.

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Ray and James Bromlley, lawyer for Sullivan and Chromwell, also supervised the bankruptcy of the Nortel giant networks in communications, which cost more than two billion dollars. Recently, the drug makers have made large fees in the bankruptcy of opiates, including Purdue Pharma LP, which paid more than $ 939 million after submitting Chapter 11 in September 2019, according to court papers.

– With the help of Stephen Church.

Bloomberg.com

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