John J. Ray, chief government officer of FTX Cryptocurrency Derivatives Exchange, arrives to a House Financial Services Committee listening to investigating the collapse of FTX in Washington, DC, on Tuesday, Dec. 13, 2022.
Al Drago | Bloomberg | Getty Images
FTX CEO John J. Ray is leaning on a staff that he is grown to know over years of chapter restructurings, and the corporate is paying them hundreds of thousands for the work that they are doing to unpack FTX’s tangled morass of accounts and shoddy data.
Ray and his high staff usually are not like typical staff who work straight for the corporate. Instead, like bankers and legal professionals who’re engaged on the chapter proceedings, the brand new management staff is skilled impartial contractors. That means, amongst different issues, that they receives a commission instantly, earlier than any FTX buyers obtain recompense for his or her losses.
associated investing news
According to courtroom filings, the brand new FTX CEO will gather $1,300 hourly plus “reasonable expenses” for his work untangling what U.S. Attorney Damian Williams known as “one of the biggest frauds in American history” in a news convention Tuesday. That works out to an annualized $2.6 million, assuming Ray works a typical 40-hour workweek for 50 weeks over a yr, permitting for 2 weeks of unpaid trip.
In one chapter case Ray labored on, he billed round 156 hours in a two-month interval, netting him $120,582, so his billings for FTX could run increased or decrease.
By approach of comparability, when Ray led Enron via its personal fraud restoration course of in 2005, helming the power firm via a part of its chapter as chairman and CEO, he collected a extra modest $1.2 million on an annualized foundation.
Ray additionally has a decent staff that has labored with him on not less than three bankruptcies all through the final three a long time, together with restructuring Enron within the early 2000s, Nortel in 2009 and Overseas Shipholding Group in 2014.
Those chapter weapons for rent are:
- Kathryn Schultea, chief administrative officer, who has labored with Ray since Enron. She can be the president and CEO of RLKS, and served at Enron and successor chapter firms from 1999 to 2014, in the end rising to help Ray as chief administrative officer in 2008.
- Mary Cilia, chief monetary officer
- Raj Perubhatla, chief data officer
LKS is charging $975 an hour per particular person, or $5.85 million annualized, for these different three leaders, who’re contracted via RLKS Executive Solutions, an organization which focuses on chapter officers for rent. The leaders from RLKS oversee administrative, monetary and data expertise efforts: a important a part of reconstructing what Ray has known as “an utter failure of corporate controls at every level.”
The complete for all 4 officers, then, runs to $4,225 an hour, or $8.45 million annualized.
FTX has recovered about $1 billion price of belongings thus far, however it might be months or years earlier than collectors are made complete. Enron’s restructuring dragged on for greater than a decade. Nortel’s proceedings are nonetheless carrying on in 2022, over 11 years later.
Correction: Ray has a staff that labored with him on restructuring Overseas Shipholding Group in 2014. An earlier model misstated the corporate identify.
