While crypto bankruptcies lead to millions in losses for investors, they also generate millions in fees for lawyers handling the most high-profile cases.
As of August, law firms working on the seven Chapter 11 crypto bankruptcies from 2022 reportedly requested and received fees totaling $751 million. The law firms that earned the most in some of crypto’s biggest bankruptcies include Sullivan & Cromwell, Kirkland and Ellis, White & Case and Cleary Gottlieb.
10 firms earning the biggest fees on crypto bankruptcy cases. Source: Bloomberg Law
The four companies earned $484 million for their work on the crypto bankruptcies. This accounts for 64% of all the charges requested and received from the Chapter 11 bankruptcy processes.
Four law firms with the biggest earnings
Law firm Sullivan & Cromwell netted the biggest gains at $215 million. The company works as debtor’s counsel to bankrupt exchange FTX. The law firm charged over $10 million monthly until February when it reduced its fees to $7 million.
Kirkland & Ellis billed the second-highest fees in the crypto bankruptcies, charging its clients $120 million. The company was the lead debtor’s counsel for firms like Voyager, BlockFi and Celsius. Its largest earnings were attributed to its work with Celsius, where the law firm earned over $75 million.
White & Case, the firm that tackled the Genesis and Celsius cases, earned about $75 million for its work. The company worked with Celsius creditors and helped investigate Alex Mashinsky, Celsius’ former CEO. In the Genesis case, it represented the unsecured creditors committee.
Cleary Gottlieb billed nearly $73 million, earning the fourth-highest earnings for legal work in crypto bankruptcies. The company is Genesis’ lead counsel on its bankruptcy process. Since its start, the case has netted the firm $2.5 million per month.
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Bankruptcy cases almost near the end
There are still ongoing bankruptcy cases, including the infamous FTX bankruptcy case and the Terraform Labs case, which resulted from the fall of its algorithmic stablecoin TerraUSD.
FTX’s confirmation hearing is scheduled for October, marking the end of the long-running bankruptcy case. Terraform Labs’ reorganization hearing is scheduled for Sept. 19.
Meanwhile, Genesis completed its restructuring plan and paid off $4 billion in compensation to injured parties on Aug. 2.
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