- Law firm McDermott Will & Emery, representing the committee of unsecured creditors of Voyager, has charged $5.1 million for their services between March and May, driving the total legal fees to $16.4 million.
- These escalating costs, critics argue, may reduce the potential payout for creditors, as increasing amounts are spent on legal fees.
The financial burden on Voyager’s unsecured creditors continues to grow as McDermott Will & Emery, the law firm acting on their behalf, has presented a hefty bill of $5.1 million for work done from March to May. This invoice takes the total legal fees up to an astonishing $16.4 million, surpassing the initially budgeted $11.2 million allocated for the restructuring process. To date, creditors have disbursed $8.9 million to cover these costs.
Legal Expenditure Breakdown
A significant part of the recent billing from McDermott attorneys includes $1 million for 970.9 hours of labor concerning plan and disclosure settlements. This work involves deliberations over sale options with Voyager (the debtors), arranging meetings with potential buyers, and scrutinizing objections raised by other involved parties.
In previous fee periods, a considerable amount of effort in this category was dedicated to the potential sale of the company’s assets to FTX. However, the proposed deal was thwarted by the subsequent bankruptcy of the exchange.
In addition to these rising costs, Voyager had to shell out an additional $1.1 million to Kirkland & Ellis, a law firm retained to represent the exchange throughout this challenging bankruptcy process.
These bankruptcy episodes, catalyzed by the 2022 market downturn, have proven to be lucrative for legal firms. Entities like FTX and Celsius have respectively spent over $200 million and $50 million on legal fees.
However, this mounting expenditure has drawn criticism. Detractors argue that the escalating costs and extended legal processes are eroding the funds available for creditors. As the legal fees continue to surge, the amount that could potentially be disbursed to creditors is diminishing correspondingly.