New CEO hired to tidy up the wreckage of collapsed FTX is billing $1,300 per hour
According to court documents filed on Sunday at the US Bankruptcy Court for the District of Delaware ahead of the first hearing on Tuesday, John Ray who is the seasoned expert brought in to tidy up the wreck of the collapsed FTX is billing $1,300 per hour. The first hearing is aimed at shedding more light on the insolvency proceedings.
The documents further show that the restructuring experts are seeking to go ahead with paying the wages of the senior staff at the collapsed exchange despite a freeze on its funds and lack of a clear record of who is owed what by the exchange.
Continued payment of salaries
About 1 million creditors including crypto users may have their funds locked up in FTX after the exchange collapsed leading to a freeze on its funds.
But even then, Edgar Mosley, the managing director of the restructuring consultancy firm, Alvarez & Marsal hired to clean up the mess, has maintained that continued payment of salaries will help preserve resources and value of FTX’s estate.
Edgar Mosley in his filling said:
“Continued payment of salaries is necessary for the preservation of the resources and value of the FTX estate. Without it, I believe that even more employees may seek alternative employment opportunities … likely, diminishing stakeholder confidence in the Debtors’ ability to successfully reorganize.”
Edgar insisted that the payments made to CEO Ray and also the $975 hourly billing of Chief Administration Officer Kathryn Schultea, Chief Information Officer Raj Perubhatla, and Chief Financial Officer Mary Cilia are important in maintaining and administering what remains of the company as it tries to repay its debts.
According to the court filing, non-employee directors hired for proper governance during the insolvency process will earn a fee of $50,000 per month. They shall also be entitled to some other allowances.
Though the fees seem to catch the attention of the general public, the fees are a drop of water into the ocean in the pricey world of corporate restructuring. Ray’s total fees only account for a fraction of the total amount of money that the $3.1 billion that the FTX allegedly owes to its principal creditors.
Lastly, Mosley also recommended that FTX should go ahead and pay an extra $17.5 million to its critical contractors, especially those that will ensure the security of the crypto assets is maintained to avoid hacking and stealing of the assets.