Celsius Initiates Voluntary Petitions For Restructuring Under Chapter 11 Bankruptcy
- Celsius confirmed that it has initiated voluntary petitions for Chapter 11 protection
- The crypto lender claims to have ample liquidity for the restructuring processs
Troubled crypto lending company Celsius Network has recently initiated voluntary Chapter 11 proceedings under the US Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York, under its restructuring plans.
As per the official announcement, Celsius aims to use the proceedings to stabilize its business and bring a comprehensive restructuring transaction that maximizes value for the company’s stakeholders.
Celsius Network aims for a smooth transition into Chapter 11
Moreover, the company has $167 million in cash on hand, which will offer “ample liquidity to support certain operations during the restructuring process,” the announcement said.
In addition, as the Celsius Network wants a smooth transition into Chapter 11, it has filed with the court a series of customary motions to ensure the continuation of operations in the normal course.
“These “first-day” motions include requests to pay employees and continue their benefits without disruption, for which the Company expects to receive Court approval,”
the announcement further reads.
Notably, the company is not requesting authority to allow customer withdrawals at the current time as those will be addressed through the Chapter 11 process.
Celsius Network is working hard to make the best out of its restructuring plans. It has brought new directors to the company for better functioning. Founder and CFO of XOUT Capital and DMB Holdings, David Barse, and the Founder and Managing Member of Drivetrain, LLC, Alan Carr are the latest additions.
Moreover, as BitcoinWisdom reported, Kirkland & Ellis LLP will be serving as the legal counsel, along with Centerview Partners and Alvarez & Marsal as the financial advisor and restructuring advisor, respectively.
The network’s co-founder and CEO, Alex Mashinsky, said that the company now has a “strong and experienced team in place to lead Celsius through this process.”
“I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company,”
he added.
Withdrawal pause was a “necessary decision”
The members of the Special Committee of the Board of Directors at Celsius Network said that the filing follows the “difficult but necessary” decision Celsius took on June 12 to pause withdrawals, swaps, and transfers on its platform.
“Without a pause, the acceleration of withdrawals would have allowed certain customers—those who were first to act—to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.”
stated the members as they went on to support the actions of the company.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
