Voyager, a corporation now in bankruptcy, is facing a severe financial strain as its legal bills continue to climb. Critics say that the company’s creditors’ eventual payoff may suffer as a result of these rising expenditures.
McDermott Will & Emery, a law firm that represents the committee of unsecured creditors, has charged a whopping $5.1 million for their services between March and May. This increases the total legal fees to an astounding $16.4 million, exceeding the $11.2 million planned figure. This funding was set aside for restructuring purposes. Creditors have already paid out $8.9 million to cover these costs.
McDermott’s current invoicing includes $1 million for roughly 970.9 hours of labor associated with plan and disclosure settlements. This endeavor entails negotiations with Voyager about prospective selling opportunities. It also entails setting up meetings with potential buyers and dealing with objections from other parties.
In addition, Voyager was required to pay a further $1.1 million to law firm Kirkland & Ellis. This sum was kept to represent the company during the difficult bankruptcy procedure.
Critics have expressed alarm about the rising cost of legal expenses, claiming that they are limiting the funds available to repay creditors. As costs continue to grow, the situation becomes increasingly uncomfortable.
JUST IN: 🚨 #Voyager's bankruptcy proceedings incur staggering $16.4M in legal fees! 📈 As costs skyrocket, creditors' payouts are at risk.
— Walletor (@walletorapp) July 5, 2023
It is important to mention that these bankruptcy episodes were precipitated by the 2022 market slump. Legal firms such as FTX and Celsius have also faced significant costs. For example, FTX and Celsius have spent millions of dollars on legal fees.
The rising legal fees in Voyager’s bankruptcy procedures show the complexities and hefty costs of such proceedings. It remains to be seen whether these rising costs will affect the final outcome. Creditors and the company’s financial recovery will be under pressure throughout this period.
Finally, the skyrocketing legal bills incurred by Voyager and its creditors during the bankruptcy process have caused alarm. As costs rise, the money available to creditors shrink, emphasizing the importance of cautious planning.