The crypto winter certainly took its toll on a number of industry heavyweights, and the crypto lender who started several important events during this challenging time is now looking to close. Indeed, Celsius Network has submitted a Chapter 11 bankruptcy filing!
According to the press release, the bankruptcy filing is to “provide the Company with the opportunity to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.”
Celsius Network filed for bankruptcy at the U.S. Bankruptcy Court of the Southern District of New York.
A Chapter 11 bankruptcy allows a company to continue operations while it continues to restructure its obligations. These restructuring plans must be in the best interests of the company’s creditors.
Last month, Celsius shocked the community by pausing withdrawals and transfers amid the market conditions. Later, it laid off about a quarter of its employees due to ongoing liquidity issues.
With $167 million in funds on hand, Celsius says that it will have more than enough liquidity to support some activities while the restructuring process is underway.
Celsius has submitted a number of “customary” motions with the Court to permit the company to carry on with its operations as usual.
Celsius anticipates receiving court approval for these “first-day” motions, which include requests to pay employees and continue their benefits without interruption.
At this moment, Celsius is not asking for permission to permit consumer withdrawals, and the Chapter 11 procedure will be used to address customer claims.
Just a few days back, Celsius switched its restructuring lawyers from Akin Gump Strauss Hauer & Feld LLP, with Kirkland & Ellis LLP, the same firm that helped Voyager Digital file for Chapter 11 bankruptcy last week.
Alex Mashinsky, Co-Founder & CEO of Celsius, stated “This is the right decision for our community and company. We have 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.”
