The United States Trustee overseeing Celsius’ bankruptcy proceedings has asked for the need of an independent examiner to “untangle” the embattled network’s financial affairs and business operations.
On Aug. 18 a motion was filed in the United States Bankruptcy Court by William K. Harrington. There the US Trustee has asked for an examiner to look into allegations of “incompetence or gross mismanagement” and “significant transparency issues” adjacent to Celsius’ operations in the context of the bankruptcy case.
Examiners, appointed by bankruptcy courts, investigate details of complex cases brought before them and present information to the courts from an independent point of view and have been appointed in other high-profile bankruptcy cases such as Lehman Brothers during the subprime mortgage crisis.
The motion claims the appointment of an examiner would be beneficial to the parties involved given the complexities of the case, as they could provide information beyond the court’s expertise.
Harrington stated that an examiner would be able to control whether legal claims should be brought against management, as there are claims of “credible allegations of incompetence or gross mismanagement.”
The U.S. Trustee has also suggested there are “significant transparency issues” surrounding Celsius’ business operations.
“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, adding the information can then be used to help evaluate any proposed restructuring or sale.
Harrington said that an examiner may be able to scrutinize the plethora of information on the internet that is muddying facts surrounding Celsius, causing its customers to form their own conclusions.
Not every party involved supports the request for an examiner, with the Celsius Official Committee of Unsecured Creditors pointing out the costs of doing so.
Experts that are not directly involved with the case seem to agree that an examiner is necessary.
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