FTX paid lead lawyers from Sullivan & Cromwell LLP more than $12 million USD before filing for Chapter 11 bankruptcy in the US, court filings revealed.
According to reports from Bloomberg Law, the New York City-based law firm used just over $3 million of the total retainer funds to conduct services for the now-bankrupt cryptocurrency exchange platform.
West Realm Shires Services Inc offered the retainer on behalf of FTX to cover the legal services from Sullivan & Cromwell.
The court filings show that the law firm provided services to advise debtors on its Chapter 11 bankruptcy, and liaise with “local and federal governmental authorities and regulators.”
It will also help with investigations on “all potential estate causes of action,” advise sell-offs of the business and facilitate negotiations on the debtor’s behalf.
FTX also paid out $15.5 million to retain services from the firm, data revealed. Currently, the law firm holds $9 million in retainer funds, the court filing added.
Developments on FTX Crisis, Arrests
The news comes after FTX filed for bankruptcy on 11 November after facing a massive liquidity crisis, sparking a bank run on its native FTT token.
Bahamian authorities recently arrested the company’s former chief executive, Sam-Bankman Fried, on the island nation. The ex-CEO was released on $250 million bail, secured with home equity from his parent’s Palo Alto, California house.
Courts have ordered the disgraced former executive to remain under house arrest with monitoring equipment as he awaits trial for mismanagement of funds and other offences.
