Law Firms Made $751 Million From Bankruptcy Proceedings Since 2022

Four of the 22 law firms dealing with bankruptcies in the crypto space made $484 million.

A Bloomberg Law report highlighted the big earnings law firms received since 2022 for handling high-profile bankruptcy cases involving those of FTX, Celsius, Terraform Labs, Genesis, and more. They have accumulated $751 million for offering legal counsel to those involved in the Chapter 11 bankruptcies.

“A group of 22 major law firms is working on seven Chapter 11 bankruptcies stemming from the crypto fallout that began in 2022. They have been paid or requested fees worth $751 million as of mid-August,” the report mentioned.  Bloomberg Law’s analysis also found that FTX’s payouts are the highest, as five firms charged $312 million for their legal services. Nevertheless, this case is soon to end, as its confirmation hearing is set for October.

Out of the 22 firms that Bloomberg Law reported to make $751 million, four, Sullivan & Cromwell, Kirkland and Ellis, White & Case, and Cleary Gottlieb, made $484 million, amounting to 64% of the total proceeds.

Sullivan & Cromwell, working as the debtors’ counsel for FTX, earned the most, netting $215 million in revenues. Kirkland and Ellis, counsel for lead debtors for companies like BlockFi, Voyager, and Celsius, is second on the list, boasting earnings of $120 million. It made $75 million from the Celsius proceedings alone. White & Case represented Celsius creditors and the unsecured creditor committee of Genesis and worked on Celsius CEO Alex Machinsky’s investigation. It brought in $75 million. Cleary Gottlieb made $73 million from acting as Genesis’ lead counsel.

Source: Bloomberg Law

High-Profile Proceedings Coming to an End

Most of these bankruptcy proceedings are coming to an end. With FTX’s bankruptcy case ending in October, Terraform has a confirmation hearing in September, Genesis finished its restructuring in early August, and Celsius has paid back at least two-thirds of its creditors.

“Even if the crypto bankruptcies will soon wrap up, the industry remains a hotbed for legal work,” Bloomberg Law said.