A recent court filing from the now-insolvent Voyager Digital Holdings and its creditor committee revealed that legal expenses amounting to $16.5 million have accumulated from July 22, 2022, through May 18, 2023. The records indicate that between March and May 2023, roughly $5.17 million in legal fees were billed to the estate.
Lawyers and Restructuring Officers Are Profiting From the Slew of Crypto Bankruptcy Cases
Lawyers for Voyager’s creditor committee unveiled the legal costs concerning the company’s ongoing bankruptcy proceedings, which began in July 2022, on July 3, 2023. According to the filing, the third interim fee period (March-May 2023) has a compensation request of $5.17 million. The document states that this is the final provisional fee application invoiced by the law firm McDermott Will & Emery LLP.
Furthermore, the filing asserts that the court granted the interim compensation order on August 4, 2022. The attorneys explain that Voyager’s Chapter 11 case was “the first to commence following a series of events in the cryptocurrency industry, which are collectively known as the ‘crypto winter.’” McDermott details that throughout the fee period, their litigation team advised the committee in all aspects of the Chapter 11 cases, including a variety of complex matters, which the committee took to maximize recoveries for general unsecured creditors.
Responsibilities included counseling the committee, participating in meetings and negotiations, and “taking all necessary action to protect and preserve the interests of the committee.” In April, Voyager Digital was also billed $1.1 million in legal fees by its law firm Kirkland & Ellis. Attorneys from Celsius, 3AC, Voyager, and FTX are reportedly reaping significant financial rewards as a result of these bankruptcy cases. John J. Ray III, CEO of FTX, is said to be earning $1,300 hourly supervising his firm’s bankruptcy and restructuring.
Should cryptocurrency companies be held accountable for the exorbitant legal and restructuring costs incurred during bankruptcy proceedings, or is it a necessary price to pay for the complexities of the industry? Share your thoughts and opinions about this subject in the comments section below.