The committee of unsecured creditors for Voyager has received an invoice from the legal team McDermott Will & Emery for $5.1 million for services provided between March and May. The group has been charged a total of $16.4 million in compensation, above the projected amount of $11.2 million established during the restructuring process. Creditors have so far contributed $8.9 million toward the invoiced compensation.
During this time, McDermott lawyers billed $1 million for 970.9 hours of labor connected to the plan and disclosure settlement, which stands out among their notable billings. Meetings with prospective buyers, conversations with the Debtors about possible sale possibilities, and responses to concerns expressed by other stakeholders are all part of this effort.
A lot of work was put into a failed agreement regarding the sale of the company’s assets to FTX prior to the exchange’s insolvency during earlier fee periods. Additionally, the debtor, Voyager, has already paid Kirkland & Ellis $1.1 million for its representation of the exchange in the court case.
2022 Was a Year of Bankruptcies and Collapses
After experiencing significant losses as a result of the collapse of the Terra ecosystem and the general decline in the cryptocurrency market, Voyager filed for bankruptcy protection in July 2022. One of many prominent crypto collapses that occurred in 2022, including the bankruptcy of Voyager, intensified governmental scrutiny of the sector.
Seven American states sent cease-and-desist letters to Voyager in March 2022 over the company’s interest-bearing cryptocurrency accounts, which the governments said were unregistered securities.
Bankruptcies increased as a result of the 2022 market slump, which was profitable for law firms. According to reports, companies like FTX and Celsius paid over $200 million and $50 million, respectively, in legal expenses.
However, detractors contend that because a sizeable amount is used for legal fees, the money available to creditors is reduced as a result of these high costs and protracted legal proceedings.