• Bankrupt cryptocurrency brokerage Voyager Digital has been ordered to pay $1.1 million in fees to Kirkland & Ellis.
• Kirkland & Ellis, renowned for cryptocurrency bankruptcy cases, charged over $1.4 million in fees at a blended hourly rate of $1,313.18
• The US Bankruptcy Court approved Voyager’s bankruptcy, revealing the financial difficulties caused by the crypto credit crisis.

Bankrupt cryptocurrency brokerage firm Voyager Digital has been ordered to pay $1.1 million to its legal advisor, Kirkland & Ellis. This is for their services related to the company’s bankruptcy proceedings in April. According to documents, Kirkland & Ellis implemented a blended hourly billing rate of $1,313.18. This was for various services provided throughout April. Moreover, the total fees charged for legal services by both attorneys and paralegals exceeded $1.4 million. Notably, some high-ranking law firm members are billed at an hourly rate exceeding $2,000 for their professional assistance.

Kirkland & Ellis is well-known for representing several cryptocurrency companies undergoing bankruptcy proceedings. Notable clients include BlockFi and Celsius. In the case of Voyager, the bankruptcy plan was approved. The United States Bankruptcy Court did this for the Southern District of New York on May 17, 2023. Moreover, this came after Binance.US withdrew its plans to purchase $1 billion worth of Voyager assets on April 25. This prompted the introduction of the third bankruptcy plan on May 5.

READ: Voyager Digital Ltd finally acquires funds to reimburse 35% of its former customers

However, Voyager Digital filed for Chapter 11 bankruptcy protection in July 2022, primarily due to the significant impact of the crypto credit crisis, which had severe repercussions across multiple lenders and brokers in the industry. In addition to the previous leadership of Steve Ehrlich, Voyager had been a publicly traded company in Canada. The bankruptcy filing revealed liabilities ranging from $1 billion to $10 billion, indicating the extent of its financial obligations and the circumstances that necessitated seeking bankruptcy protection.

Moreover, Voyager is not alone in incurring substantial fees during its bankruptcy process. FTX, another company entangled in bankruptcy proceedings, amassed fees exceeding $120 million in financial and legal advisory services from February 1 to April 30. It highlights the considerable costs associated with navigating bankruptcy procedures and the involvement of legal and financial experts.

These significant fees paid to legal advisors underscore the complexity and importance of handling bankruptcy cases in the cryptocurrency industry. The involvement of reputable law firms specializing in cryptocurrency bankruptcies, such as Kirkland & Ellis, demonstrates the demand for their expertise and knowledge in this emerging field. The substantial liabilities companies like Voyager and FTX face exemplify the challenges and risks inherent in the cryptocurrency market.

READ: Bittrex Crypto exchange files for Bankruptcy

As the cryptocurrency industry evolves, companies must establish robust financial management practices and risk mitigation strategies. In addition, the volatility and unpredictability of the market necessitate careful planning and contingency measures to avoid financial distress. While bankruptcy protection can provide a lifeline for struggling firms, the associated costs and legal complexities underscore the need for proactive and responsible financial management within the cryptocurrency sector.

In conclusion, Voyager Digital’s bankruptcy proceedings have led to the company being obligated to pay significant fees to its legal advisor, Kirkland & Ellis. The complexities of cryptocurrency bankruptcies have resulted in substantial costs, reflecting the challenges faced by companies in the industry. The involvement of reputable law firms highlights the demand for specialized expertise in navigating these unique situations. Companies must prioritize sound financial practices to mitigate risks and avoid potential financial distress as the cryptocurrency market evolves.