Recent developments in the bankruptcy cases of Celsius, BlockFi, and Voyager Digital crypto firms have put the spotlight on the legal prowess of Kirkland & Ellis. The law firm, renowned for its expertise in corporate restructuring, is poised to earn a staggering $120 million as lead counsel in these high-profile cases.
The trajectory of these cases illuminates the volatile nature of the crypto market.
Law Firms Cash in on Crypto Bankruptcy Cases
Kirkland & Ellis represented the three crypto exchanges, with partner Joshua Sussberg at the helm. Their involvement began in June 2022, a period marked by significant cryptocurrency losses.
The firm’s final fee application in the Celsius case alone amounted to $76 million, a figure that overshadows its earnings from the Voyager and BlockFi cases, which were $27 million and $16 million, respectively.
This financial gain for Kirkland & Ellis comes amidst a broader context of turmoil within the cryptocurrency sector. The Celsius case, particularly intricate due to an investigation into former CEO Alex Mashinsky, culminated in a court-approved bankruptcy exit involving a Bitcoin mining operation.
Other major law firms, including White & Case and Latham & Watkins, have also submitted significant fee requests for their roles in these cases.
Celsius Network Proceedings Update
Meanwhile, Celsius Network has extended a settlement opportunity to its large account holders, a crucial step in its restructuring process. This move aims to resolve the ‘Withdrawal Preference Exposure.’
This is in regard to significant transfers made within 90 days before the Petition Date of July 13, 2022. Account holders with exposure exceeding $100,000 are eligible for this settlement. It may likely have far-reaching implications for the distribution of funds to creditors.
Celsius Network Altcoin Holdings YoY % Change. Source: Kaiko
On a more optimistic note, BlockFi has emerged from bankruptcy, signaling a potential turnaround. The company’s focus is now on recovering assets owed by FTX and Three Arrows Capital.
All in all, the success of Kirkland & Ellis highlights its status as a leader in corporate restructuring. It also reflects the complexities and challenges inherent in the crypto market.
Read more: 5 Best BlockFi Credit Card Alternatives In 2023
