A recent Law 360 story by Hilary Russ, “Kirkland Lands $28M in Fees in Crypto Broker Voyager Ch. 11”, reports that a New York judge approved nearly $89 million in fees for lawyers and other professionals — including $28 million for debtors' counsel Kirkland & Ellis LLP — working on the bankruptcy case of defunct crypto broker Voyager Digital, despite an outburst from an angry creditor.
U.S. Bankruptcy Judge Michael Wiles granted the final fee applications from 17 different law firms, financial advisers, investment bankers, agents, consultants and tax services providers employed by the debtors and the official committee of unsecured creditors. An additional $1.3 million was granted to cover total professional expenses since the start of the case.
Amid the spectacular crash of the cryptocurrency industry, Voyager filed for Chapter 11 protection in July 2022 after crypto hedge fund Three Arrows Capital defaulted on a $650 million loan, casting the brokerage and trading platform into a liquidity crisis. In April, the company pivoted to a liquidation of its $1 billion in assets after a purchase agreement with Binance.US collapsed.
Plan administrator Paul Hage is now liquidating remaining crypto assets for Voyager customers who did not make full withdrawals, with more than 500,000 checks to go out to creditors in coming weeks, his lawyer Darren Azman said during a telephonic hearing. In the next couple of weeks, ex-Voyager clients should also be able to access a new customer portal, similar to a revamped Voyager app, where they can find their historical transaction information and get updates. "We're working very hard on this," Hage said during the hearing. "It is not an insignificant undertaking."
Professional fees have been garnering increased attention in the extremely complex crypto cases. Fees in five big crypto bankruptcy cases — FTX, Voyager, Celsius Network, BlockFi and Genesis Global — have topped $700 million altogether since last year, according to a New York Times analysis published last week. The final fee requests in Voyager's case did not face any objections. But two former clients of the platform, who represented themselves during a hearing, questioned some aspects of professionals' work and unsuccessfully requested a delay in payouts.