Celsius network released a statement on Wednesday stating that it has filed for chapter 11 bankruptcy
The firm will continue to stay operational and has $167 million in cash to proceed with further developments.
After going through multiple tribulations in the past few weeks, Celsius Network has now filed for Chapter 11 bankruptcy. The company in its official press statement has outlined its intention to chart a “comprehensive restructuring plan” that will benefit all “stakeholders” involved in the best way possible.
Celsius Network Says It Has Enough Liquidity To Support Operations
Celsius Network released a new statement on Wednesday adding that they are actively filing for a chapter 11 bankruptcyin the U.S. Bankruptcy Court for the Southern District of New York.
The statement further states that the network has initiated the chapter 11 bankruptcy process to settle its business and chart a comprehensive restructuring plan that maximizes benefits for all stakeholders.
“-Celsius Network (“Celsius” or “the Company”) today announced that it initiated voluntary Chapter 11 proceedings to provide the Company with the opportunity to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders.” The statement reads
Celsius Network’s special committee of the board of directors has further added that the firm’s decision to pause swaps, deposits, and withdrawals was taken as a measure to stabilize its business and protect its customers from further harm. The network believes that without initiating a pause on withdrawals, the acceleration of withdrawals would have allowed certain customers to be paid in full, leaving others behind to wait for the company to “harvest value from long-term deployment activities.”
“Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers. 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.” As stated by Members of the Special Committee of the Board of Directors.
Providing the estimate of its assets in detail, the firm said that it has $167 million in cash which will be sufficient for the firm to stay operational and wrap up the concerned proceedings. The network has also filed for a series of customary motions with the court which include requests such as permission to “pay employees and continue their benefits without disruption.”
As reported earlier, Kirkland and Ellis SLP firm will be assisting the Celsius network to combat its current legal crisis.
Speaking about Celsius’s decision to file for chapter 11 bankruptcy, Alex Mahinsky, CEO of Celsius Network 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.”
The crypto lender platform came into the spotlight earlier this month when it suddenly halted its deposits, swaps, and withdrawals sending shockwaves among the crypto community. The firm since then has been in the process of paying back its creditors by hiring restructuring lawyers.