US trustee asks examiner to probe Celsius’ transparency issues, as the aforementioned US Trustee, which is overseeing the company’s bankruptcy proceedings, requested an appointment with an independent examiner.
US Trustee Asks Examiner To Probe Celsius
In a motion filed on August 18 in the United States Bankruptcy Court by William K. Harrington, the US Trustee requested that an examiner looks into charges of “incompetence or gross mismanagement” as well as serious transparency concerns surrounding Celsius’ activities in the context of the bankruptcy case.
Bankruptcy courts assign examiners to investigate the intricacies of complicated cases filed before them. They can offer material to the courts from a neutral standpoint and have been appointed in previous high-profile bankruptcy cases, such as Lehman Brothers during the subprime mortgage crisis.
Given the intricacies of the case, the appointment of an examiner, according to the application, would be advantageous to the parties involved since they may supply information beyond the court’s knowledge.
“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.”
In addition, Harrington stated that an examiner would be able to evaluate if legal claims should be launched against management if there are credible charges of incompetence or severe mismanagement.
The US Trustee has also said that Celsius’ business practices have serious transparency problems.
“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.
Harrington also mentioned that an examiner might be able to sort through the avalanche of material on the internet that is muddying the facts about Celsius, enabling its clients to create their own opinions.
Not every party involved agrees on the need for an examiner, with the Celsius Official Committee of Unsecured Creditors noting out the expenses.
@CelsiusUcc is concerned about the effort to interject an outside “examiner” into @CelsiusNetwork bankruptcy case. It will run up millions in costs when CEL should cut costs. Let @CelsiusUcc do its job for account holders @TheJusticeDept
— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) August 18, 2022
Celsius Can Mine And Sell Only Bitcoin
In recent news, Celsius was allowed to mine and sell its assets, with the caveat that it can only do so with the Bitcoin assets it possesses. A New York judge, Martin Glenn, granted Celsius’ request to run the BTC mining and selling operation. This was requested and approved in order to restore the financial stability of the company, at least for the time being.
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