• FTX creditors are looking to expedite bankruptcy proceedings as legal fees are becoming increasingly expensive.
• According to a Reuters article, the agreement was to repay users by liquidating FTX’s assets.
• According to court-appointed fee examiner Katherine Stadler in June, FTX incurred about $200 million in legal and advisory costs in seven months.
FTX’s Bankruptcy Rakes Up Nearly $50 Million Monthly In Legal Fees
FTX creditors are looking to expedite bankruptcy proceedings as legal fees are becoming increasingly expensive, possibly eating into the money paid to creditors. While attorneys of FTX are working towards recovering what remains of the once global crypto exchange and repaying customers, creditors have grown frustrated with the lengthy bankruptcy process and are seeking to hasten mediation.
Agreement To Repay Users By Liquidating Assets
According to a Reuters article on Aug. 23, the agreement was to repay users by liquidating FTX’s assets. However, creditors are displeased about the crypto exchange’s slow negotiation pace to get a buyer that would restart FTX, according to the firm’s attorney, Brian Glueckstein.
Increasingly Expensive Legal Costs
Kris Hansen, an attorney representing the official creditors’ committee, stated that attorney fees and other costs have climbed up nearly $50 million monthly which potentially reduces the money creditors receive as the process continues to drag. In a report filed by court-appointed fee examiner Katherine Stadler in June, FTX incurred about $200 million in legal and advisory costs in seven months.
Secrecy With Information On Interested Bids
Hansen further argued that FTX has been secretive with information on interested bids stating that debtors have treated members of the creditors’ committee with “misplaced mistrust” and trymmingto prevent them from speaking with prospective bidders.
Former CEO Pleads Not Guilty To Fraud Charges
FTX co-founder and former CEO Sam Bankman-Fried is currently at Metropolitan Detention Center in Brooklyn where he pleaded not guilty fraud and conspiracy charges in a fresh indictment. Bankman-Fried’s lawyer also recently argued that jail authorities failed provide meal requirement of former crypto mogul refused access his medication