Voyager Digital, a crypto lending and brokerage firm, has paid a hefty sum of $1.1 million to Kirkland & Ellis, a prestigious law firm, for its legal services during its bankruptcy process in April.
![Voyager Pays Kirkland $1.1M for Crypto Bankruptcy Work](https://i0.wp.com/coinscreed.com/akoakris/2023/06/Voyager-digital.jpg?resize=718%2C449&ssl=1)
Voyager was one of the leading crypto brokers in the industry, offering users access to over 50 digital assets and interest-bearing accounts.
However, the company faced liquidity issues and margin calls as the crypto market crashed in May, forcing it to halt its operations and seek bankruptcy protection.
Kirkland & Ellis: Voyager’s Legal Ally
Voyager hired Kirkland & Ellis to serve as its legal counsel in mid-June, replacing its previous counsel Akin Gump. Kirkland & Ellis is known for representing various crypto companies that have faced bankruptcy, including BlockFi and Celsius.
The law firm has extensive experience and expertise handling complex bankruptcy cases, especially those involving crypto assets.
According to official documents, Kirkland & Ellis utilized a blended hourly billing rate of $1,313.18 for all the services provided throughout the month of April.
The total fees charged by attorneys and paralegals exceeded $1.4 million, with some of the top-ranking members of the firm commanding an hourly rate exceeding $2,000.
The decision to engage Kirkland & Ellis as its legal advisor highlights the complexity and challenges associated with navigating the bankruptcy process in the cryptocurrency industry.
The significant fees charged by the law firm shed light on the high costs of securing experienced legal representation during such proceedings.
Voyager’s Recovery Prospects
Voyager’s bankruptcy case is ongoing as the company seeks to restructure its debts and resume operations. The company has been in discussions with potential buyers, investors, creditors, and regulators.
The company has also been working on resolving various claims and disputes arising from its business activities.
According to a recent court filing, Voyager has reached a settlement agreement with Three Arrows Capital, one of its largest creditors that had filed a lawsuit against Voyager for breach of contract and fraud.
Voyager will pay Three Arrows Capital $50 million in cash and issue 10 million shares of its common stock as part of the settlement.
Additionally, Voyager has received approval from the court to sell some of its assets, including its intellectual property rights and customer data, to a third party for $15 million.
The company hopes to use the proceeds from the sale to pay off some of its debts and fund its operations.
The bankruptcy filing by Voyager Digital resulted from the crypto credit crisis, which had a profound impact on various lenders and brokers in the industry.
The company, once touted as a rising star in the cryptocurrency brokerage space, faced substantial liabilities ranging from $1 billion to $10 billion at the time of its Chapter 11 filing.
This staggering level of indebtedness necessitated a thorough and strategic approach to the bankruptcy process, which likely contributed to the substantial legal fees incurred.
Kirkland & Ellis, known for its expertise in handling complex bankruptcy cases, including those involving crypto companies, has emerged as a go-to firm in the industry.