Crypto brokerage Voyager Digital Holdings Inc. has hired a major law firm to investigate the role of company insiders in a massive loan to troubled hedge fund Three Arrows Capital.
Manhattan attorney Susheel Kirpalani is leading the Quinn Emanuel Urquhart & Sullivan team handling the investigation, according to a court filing Thursday. Kirpalani charges the company about $2,000 an hour for its services.
In March, Voyager lent Three Arrows 15,250 Bitcoin and $350 million before the hedge fund imploded, triggered by the collapse of stablecoin TerraUSD and the broader decline of crypto assets, according to court documents.
The coins and cash are valued at $674 million, according to a bankruptcy petition Voyager filed this week against Three Arrows, which is liquidating assets in a court in the British Virgin Islands. It’s unclear whether Voyager will collect its unsecured claim in the process, but it said it was pursuing “every avenue available” to collect the money.
Quinn Emanuel’s legal team is investigating whether Voyager should sue ‘insiders’ linked to the Three Arrows loan, according to a court document filed Thursday.
Kirpalani and the other attorneys represent a special Voyager committee made up of two independent directors who joined the company when it filed for Chapter 11 bankruptcy earlier this month.
Kirpalani, chairman of Quinn Emanuel’s Bankruptcy and Restructuring Group, declined to comment on his nomination.
He is a highly regarded New York restructuring partner who has represented independent directors or special committees in the bankruptcies of J. Crew Group Inc., JC Penney Company Inc. and others. He also played a role in the liquidation of Bernard Madoff’s defunct company.
Kirpalani’s hourly rate is typically $2,130 an hour, the firm said in the court filing, but he and other attorneys will offer a 10% discount on their rates, a common practice in bankruptcy cases. . Quinn Emanuel’s first-year associates on the case typically charge $830 an hour, according to the filing.
A handful of Big Law attorneys are charging more than $2,000 an hour after billing rates rose during a period of high demand for corporate attorneys over the past two years.
Voyager’s special committee includes Jill Frizzley, a former restructuring partner at Weil Gotshal & Manges who now provides independent advisory services to the board as chair of Wildrose Partners.
Three Arrows founders Su Zhu and Kyle Davies have resurfaced five weeks after the companies collapsed, Bloomberg reported. The pair, who likened the implosion to the failure of Long Term-Capital Management, are moving their operations to Dubai.
Kirkland & Ellis attorneys are representing Voyager in the closely watched bankruptcy case, which could provide important rulings on how crypto assets are treated in restructurings. The company also represents struggling crypto lenders Celsius Network LLC and Babel Financeas he became an early leader in restructuring advice to bankrupt crypto companies.