New FTX CEO is getting paid $1,300 an hour, and customers will foot the bill

FTX CEO John J. Ray is leaning connected a squad that he's grown to cognize implicit years of bankruptcy restructurings, and the institution is paying them millions for the enactment that they're doing to unpack FTX's tangled morass of accounts and shoddy records.

Ray and his apical squad are not similar emblematic employees who enactment straight for the company. Instead, similar bankers and lawyers who are moving connected the bankruptcy proceedings, the caller enactment squad is nonrecreational autarkic contractors. That means, among different things, that they get paid immediately, earlier immoderate FTX investors person recompense for their losses.

According to court filings, the caller FTX CEO volition cod $1,300 hourly positive "reasonable expenses" for his enactment untangling what U.S. Attorney Damian Williams called "one of the biggest frauds successful American history" successful a quality league Tuesday. That works retired to an annualized $2.6 million, assuming Ray works a modular 40-hour workweek for 50 weeks implicit a year, allowing for 2 weeks of unpaid vacation.

In 1 bankruptcy lawsuit Ray worked on, helium billed astir 156 hours successful a two-month period, netting him $120,582, truthful his billings for FTX whitethorn tally higher oregon lower.

By mode of comparison, erstwhile Ray led Enron done its ain fraud betterment process successful 2005, helming the vigor institution done portion of its bankruptcy arsenic president and CEO, helium collected a much humble $1.2 cardinal connected an annualized basis.

Ray besides has a choky squad that has worked with him connected astatine slightest 3 bankruptcies passim the past 3 decades, including restructuring Enron successful the aboriginal 2000s, Nortel successful 2009 and Overseas Shipholding Group successful 2014.

Those bankruptcy guns for prosecute are:

• Kathryn Schultea, main administrative officer, who has worked with Ray since Enron. She is besides the president and CEO of RLKS, and served astatine Enron and successor bankruptcy companies from 1999 to 2014, yet rising to assistance Ray arsenic main administrative serviceman successful 2008.
• Mary Cilia, main fiscal officer
• Raj Perubhatla, main accusation officer

LKS is charging $975 an hr per person, oregon $5.85 cardinal annualized, for these different 3 leaders, who are contracted done RLKS Executive Solutions, a institution which specializes successful bankruptcy officers for hire. The leaders from RLKS oversee administrative, fiscal and accusation exertion efforts: a captious portion of reconstructing what Ray has called "an utter nonaccomplishment of firm controls astatine each level."

The full for each 4 officers, then, runs to $4,225 an hour, oregon $8.45 cardinal annualized.

FTX has recovered astir $1 cardinal worthy of assets truthful far, but it could beryllium months oregon years earlier creditors are made whole. Enron's restructuring dragged connected for much than a decade. Nortel's proceedings are inactive carrying connected successful 2022, implicit 11 years later.

Correction: Ray has a squad that worked with him connected restructuring Overseas Shipholding Group successful 2014. An earlier mentation misstated the institution name.