The Price of Legal Retainers
In the riveting saga of FTX’s downfall, it seems the crypto exchange didn’t just gamble away digital currency but also sprawling amounts of traditional cash. A recent court filing revealed that FTX was not shy about forking over $12 million to retain the prestigious legal services of Sullivan & Cromwell LLP. Yes, you read that right—$12 million! That’s enough for a small island, or at least a decent yacht.
Rolling Up the Bills
But wait, there’s more! In addition to that jaw-dropping retainer fee, FTX also dished out nearly $3.5 million in just 90 days leading up to their Chapter 11 bankruptcy filing. Totaling it up, that’s at least $15.5 million spent on legal fees. Not exactly the kind of dynamics you’d expect to see with an exchange that just declared bankruptcy, right? It’s almost like writing checks with the hopes of getting paid back in crypto—spoiler alert: it didn’t work out that way.
Retainer Status Update
Now, Sullivan & Cromwell holds onto nearly $9 million of that colorful retainer. Imagine being the lawyers in this scenario—sure, the retainer is hefty, but the preceding claims and sheer drama could be a thrilling legal rollercoaster that you never signed up for. Perhaps they’ll end up with a documentary about their wild ride through FTX’s tangled web.
Investors Left in the Lurch
When FTX filed for bankruptcy on November 11, it wasn’t just Sam Bankman-Fried’s exit stage left that made headlines; investors also experienced the grim reality of losing all access to their funds. Meanwhile, some exchanges have been trying to restore confidence through proof-of-reserve initiatives, essentially saying, “Hey, look! We actually have your funds!” Although, let’s hope that’s not as reassuring as a toddler’s pretend play.
Judicial Conflicts and Withdrawals
The dust didn’t settle there. District Judge Ronnie Abrams found herself in a pickle. Not wanting her husband’s former connection to the case to become something straight out of a soap opera, she promptly withdrew from presiding over the FTX case. Her reasoning sounded straight from a courtroom drama: “To avoid any possible conflict, or the appearance of one…” In other words, just because your spouse knows a guy doesn’t mean you’re in cahoots.
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