Kirkland & Ellis is set to make more than $120 million for its work as the main attorney for three major crypto exchanges that filed for Chapter 11 during the peak of cryptocurrency losses in 2022.
The law firm represented BlockFi Inc., Celsius Network LLC, and Voyager Digital Holdings Inc., all of which filed for bankruptcy between June and November 2022. The firm’s New York-based partner, Joshua Sussberg, led Kirkland’s representations in all three cases.
Kirkland’s final fee application in the three cases was filed Thursday in the Celsius case, with the firm requesting $76 million. This request far exceeds Kirkland’s bills for the other two cases, which have already been completed. Kirkland received over $27 million in the Voyager case and $16 million in the BlockFi case.
For the world’s largest law firm by revenue, securing these cutting-edge crypto jobs helped solidify its reputation as the leading corporate restructuring law firm. However, crypto holders whose assets were involved in the cases have criticized the size of the fees, despite the fact they have been approved by judges.
Prior to the fallout of the crypto exchanges, Kirkland controlled a record market share of over 40% of major Chapter 11 filings in 2020, during the busiest bankruptcy year since the Great Financial Crisis, fueled by the pandemic and business closures.
The Celsius case, filed in November 2022, has resulted in major law firms requesting nearly $145 million in fees. The failed crypto lender won court approval for a bankruptcy exit that will see the company start up a creditor-owned Bitcoin mining operation.
The case was complicated by an investigation into the former CEO, Alex Mashinsky, who was charged in July by federal prosecutors for allegedly manipulating the company’s self-issued token. He has pleaded not guilty and is facing a trial later this year.
White & Case submitted a final fee request of more than $50 million for its work on behalf of unsecured creditors—largely Celsius’ customers whose crypto assets were held on the exchange. The law firm helped investigate Celsius’ pre-bankruptcy business, including Mashinsky’s conduct, according to its fee request.
Latham & Watkins is seeking $12.3 million for its work as special litigation counsel for Celsius. The firm indicated that it represented the company in over 20 separate U.S. regulatory and criminal investigations.
Akin Gump Strauss Hauer & Feld submitted a fee request of $6.1 million for its work as special litigation counsel to Celsius. According to their fee request, the firm reached a settlement with a counterparty that resulted in the return of crypto tokens worth more than $105 million to Celsius.
The portion of the Celsius case that requires court-approved fees is over, but Kirkland and White & Case stated that they had incurred further fees that would be paid outside of the bankruptcy process.
“Ending the $20-million-a-month ‘burn rate’ of professional fees in the case has been the focus of the principals and professionals of both the Debtors and the Committee for many months, especially as these cases neared their conclusion,” Kirkland wrote in its request for fees.
While Kirkland represented the earliest crypto exchange Chapter 11 filings, the largest such case, FTX, is led by Sullivan Cromwell.
Kirkland’s Sussberg also offered his services to represent the creditors committee in that case but lost out to Paul Hastings.