- Celsius has begun financial restructuring for business stabilization and increased stakeholder value.
- Voluntary petition for chapter 11 protection has been filed.
- New directors have been appointed for additional leadership and expertise.
Celsius Network has announced beginning voluntary Chapter 11 proceedings to stabilize its business and accomplish an extensive restructuring transaction that can maximize the value for the stakeholders.
Both the company and a few of its subsidiaries have filed voluntary petitions for the purpose of reorganization that falls under Chapter 11 of the US Bankruptcy Code.
Members of the Special Committee of the Board of Directors said that the filing is a tough call by Celsius but crucial to stop withdrawals, transfers and swaps to stabilize the business and shield the customers.
This decision was made with the intention to provide 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 crypto industry.— Celsius (@CelsiusNetwork) July 14, 2022
Without a pause, customers who were first to act would have been paid in full owing to the acceleration of withdrawals. Also, others would have to wait for Celcius to harvest value from illiquid or longer-term asset deployment activities before getting a recovery.
Alex Mashinsky, Co-founder & CEO of Celsius said that the decision is apt for the company and community. The robust and experienced team will lead Celsius and in future, it will be considered a defining moment that not only served the community but also strengthened the company’s future.
Celsius has $167 million in cash, which is sufficient for enough liquidity in order to support specific operations while the restructuring process goes on.
For a seamless transition into Chapter 11, Celsius has filed a series of customary motions; this, enabling the company to operate the normal way.
The first day motions contain requests regarding paying the employees and continuing the perks without any hurdle. Approval from the court on this is awaited. Currently, Celsius is not requesting authority for customer withdrawals.