The infamous legal firm Sullivan & Cromwell is reportedly on course to make a fortune as a result of its work on the bankruptcy case involving the FTX bitcoin exchange, as stated in a recently published article.
According to a report from Bloomberg Law dated January 27, the expenditures incurred by Sullivan & Cromwell in the FTX case are anticipated to reach hundreds of millions of dollars by the conclusion of the firm's bankruptcy inquiry.
The FTX trial is set to begin in October 2023; thus, the firm's attorneys have about eight months to resolve the complex FTX matter, which will need a significant investment of both time and money. More than 150 employees are now working on the FTX case at Sullivan & Cromwell, including 30 partners who charge more than $2,000 per hour for their services. According to a court filing, the study states that associates are charging up to about $1,500 per hour for their services.
Sullivan & Cromwell said in a document filed with the court that its proposed costs are competitive with the market rates charged by other major law firms, and that these fees actually constitute a reduction when compared to the rates charged for cases that are not related to bankruptcy.
The crypto winter of 2022 resulted in a significant increase in the number of bankruptcy files, some of which were submitted by large cryptocurrency companies such as Genesis Global Trading, Celsius Network, and Voyager Digital. This resulted in a high demand for bankruptcy professionals.
According to Jonathan Lipson, a professor of law at Temple University, attorneys are likely to do extremely well in cases like FTX, "much as the professionals have done very well in previous significant cases." FTX is an example of a case where lawyers are expected to do very well. For instance, the legal firm Weil Gotshal, which is situated in New York City, generated over $500 million in fees off of the bankruptcy of Lehman Brothers in 2008.