Creditors of Voyager Digital must pay lawyers McDermott Will & Emery LLP $5.1 million in fees for work done from March to May.
Voyager’s lawyer’s latest fees will take the estate’s bankruptcy budget roughly $5 million over the initial $11.2 million it budgeted.
Voyager Lawyers’ Fees Cover Lengthy Asset Sale Negotiations
So far, the firm has paid $9 million in legal costs, including $1 million to another law firm, Kirkland & Ellis LLP, to represent it. McDermott seeks compensation for 5332.6 hours of professional, semi-professional, and non-professional services, including advising Voyager’s Committee of unsecured creditors.
In addition to the fees, McDermott seeks reimbursement of $151,221 for the firm’s expenses. About 1441 of McDermott’s billable hours were spent discussing Voyager asset disposals.
Voyager filed for bankruptcy on July 5, 2022, amid a crypto downturn caused in large part by the Terra Luna collapse. Bankrupt crypto hedge fund Three Arrows Capital owed the firm over $620 million.
Since the filing, the court passed the Interim Compensation Order to compel Voyager to pay professionals interim compensation.
About five weeks later, the crypto broker accepted a bid by FTX for its assets. The deal became null and void after FTX filed for bankruptcy in November.
After the deal fell through, Voyager pursued a sale of its assets to Binance.US. However, the US arm of the world’s largest exchange walked back on the agreement on April 25, prompting Voyager liquidation procedures. Since June 5, Binance.US is locked in a legal battle with the US Securities and Exchange Commission.
High Legal and Professional Fees Rankle Creditors
Creditors in Voyagers’ and FTX’s bankruptcy cases have contested the high legal fees professional administrators have charged. They argue that the increased fees will not leave sufficient funds to reimburse creditors’ waiting to receive a percentage of their own funds.
Last year, John Ray, the insolvency expert hired to oversee FTX’s bankruptcy proceedings, reportedly earned $1,300 per hour.
About a week ago, FTX confirmed it is in early talks with potential investors to restart the exchange. The new corporate structure would likely offer bereft creditors a stake in the new entity.
Voyager’s Committee of Unsecured Creditors secured approval from Judge Michael Wiles for its liquidation arrangement on May 17. Customers will get at least 36% of their assets, or more, if Voyager wins a dispute with FTX.
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