Crypto firm Celsius files for Chapter 11 bankruptcy
Celsius Network has announced that it initiated voluntary Chapter 11 proceedings. 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.
Celsius claims it has $167 million in cash on hand. 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. These have been suspended since mid-June. Customer claims will be addressed through the Chapter 11 process.
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.
Celsius posted the following statement on its blog:
Moments ago, we announced that Celsius voluntarily filed petitions for Chapter 11 reorganization.
Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, Swap, 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.
Following the stated pause on June 12, 2022, we want you to know that we spent a great deal of time exploring our options.
These Chapter 11 cases provide the Company with the best opportunity to stabilize the business, consummate a comprehensive restructuring transaction that maximizes value for all stakeholders, and emerge from Chapter 11 positioned for success in the cryptocurrency industry.
We apologize that communication with our teams and community has been very limited over the past few weeks, and we look forward to being able to offer greater transparency with everyone through our reorganization, which encourages dialogue with all stakeholders.
For additional information regarding Chapter 11 protection, please watch this video.
Additional information about the Chapter 11 filing, including Court documents, can be found at https://cases.stretto.com/celsius. Stakeholders with questions may call Celsius’ Claims Agent, Stretto, at +1 (855) 423–1530 (U.S.) or +1 (949) 669–5873 (international) or email firstname.lastname@example.org.
Acting in the best interest of our stakeholders, including our entire customer community, is our top priority. We are also entering this process with the intention of emerging as a stronger company.
We thank you for your patience. It is our pleasure to serve you.