United States Trustee Requests Independent Examiner in Celsius Bankruptcy Case

United States Trustee Requests Independent Examiner in Celsius Bankruptcy Case

3 months ago

The Celsius bankruptcy case takes another twist, as the U.S. asks for an independent examiner.

United States Trustee Requests Independent Examiner in Celsius Bankruptcy Case

As if the Celsius bankruptcy case could not get any messier, U.S. government officials requested the appointment of an independent examiner.

According to a court filing published on Thursday, the examiner would look into the company's financials and aim to resolve the "significant transparency issues" Celsius is experiencing.

Independent examiners are nothing new and have been deployed in other high-profile bankruptcies, like Enron and Lehman Brothers.

The filing reads:

"There is no real understanding among customers, parties in interest, and the public as to the type or actual value of crypto held by the Debtors or where it is held.

An independent examiner is necessary here to investigate and report in a clear and understandable way on the Debtors' business model, their operations, their investments, their lending transactions, and the nature of the customer accounts to ensure public confidence in the integrity of the bankruptcy system and to neutralize the inherent distrust creditors and parties in interest have in the Debtors."

For instance, the filing acknowledges that Celsius took out a loan but stresses that "no description of the types of claims" by Celsius is provided, including the lender or the collateral of the loan.

Moreover, the "extreme financial irregularities" in the bankruptcy case warrant "the appointment of an independent and disinterested examiner in the best interests of creditors, equity security holders, and the bankruptcy estates."

Such an investigation would also look into "fraud, dishonesty, incompetence, misconduct, mismanagement, or irregularity in the management of the affairs."

A Twitter account created by (and for) unsecured Celsius creditors rebutted the need for such an independent examination, saying it would incur costs at the wrong time:

Celsius account holders can receive more information about the state of the bankruptcy case in the creditor committee’s newly-formulated FAQ:

The request comes only days after news broke that Celsius would only have cash until the end of October before entering technical bankruptcy.
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