The United States Trustee handling Celsius’ bankruptcy proceedings has called for an independent examiner to be brought in to “untangle” the embattled network’s financial affairs and business operations. 

In a motion filed on Aug. 18 to the United States Bankruptcy Court by William K. Harrington, the US Trustee has asked for an examiner to look into allegations of “incompetence or gross mismanagement” as well as “significant transparency issues” surrounding Celsius’ operations in the context of the bankruptcy case.

Examiners are appointed by bankruptcy courts to investigate details of complex cases brought before them. They are able to present information to the courts from an independent point of view and have been appointed in other high-profile bankruptcy cases such as Lehman Brothers during the subprime mortgage crisis.

According to the motion, the appointment of an examiner would be beneficial to the parties involved given the complexities of the case, as they could provide information beyond the court’s expertise.

“An investigation by an independent examiner—who would present his or her findings in an understandable way—is essential to provide the Court, the United States Trustee, creditors, and other parties in interest with transparency and clarity as to the business structure, practices, and liquidity of the Debtors.”

Harrington also mentioned that an examiner would be able to determine whether legal claims should be brought against management, as there are claims of “credible allegations of incompetence or gross mismanagement.”

The U.S. Trustee has also suggested there are “significant transparency issues” surrounding Celsius’ business operations.

“The Debtors have not provided adequate information regarding their liquidity position, their business model, the flow of traditional cash funds, or the value of their crypto assets,” Harrington said, adding the information can then be used to help evaluate any proposed restructuring or sale.

Harrington also added that an examiner may be able to sift through the plethora of information on the internet that is muddying facts surrounding Celsius, causing its customers to form their own conclusions.

Not every party involved supports the request for an examiner, with the Celsius Official Committee of Unsecured Creditors pointing out the costs of doing so.

Experts that are not directly involved with the case, however — such as Bankruptcy Partner at McCarter & English David Adler – seem to agree that an examiner is warranted.


Source: Cointelegraph

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments