Files Voluntary Petitions for Chapter 11 Protection
Ample Liquidity with $167 Million in Cash to Support Operations
Celsius Network 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. To implement the restructuring, the Company and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (“the Court”).
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Members of the Special Committee of the Board of Directors said, “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.”
“This is the right decision for our community and company,” said Alex Mashinsky, Co-Founder & CEO, Celsius. “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.”
Celsius to Continue to Operate
Celsius has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.
To ensure a smooth transition into Chapter 11, Celsius has filed with the Court a series of customary motions to allow the Company to continue to operate 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. Celsius is not requesting authority to allow customer withdrawals at this time. Customer claims will be addressed through the Chapter 11 process.
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New Directors to Provide Additional Leadership and Expertise
David Barse is the Founder and Chief Executive Officer of XOUT Capital, an index company, and DMB Holdings, a private family office. Mr. Barse was formerly the CEO of Third Avenue Management for 25 years, a pioneer in fundamental, bottom-up deep value and distressed investing.
Alan Carr is an investment professional with over 25 years of experience building businesses, leading complex restructurings, and protecting and creating value for stakeholders. Mr. Carr is a Founder and the Managing Member of Drivetrain, LLC, a professional fiduciary services firm.
Advisors
Kirkland & Ellis LLP is serving as legal counsel, Centerview Partners is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to Celsius.
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