Crypto firm Celsius withdraws motion to appeal former CFO for bankruptcy proceedings

Diving brief:

  • Celsius Network cryptocurrency firm withdrew a motion to listen his former chief financial officer, Rod Bolger, as counsel for his pending bankruptcy proceedings in a filing with U.S. Bankruptcy Court Southern District of New York on Friday evening.
  • The withdrawal came three days after lawyers for former Celsius investors filed an objection to Bolger’s role as a potential adviser on August 2, alleging that the crypto platform’s application gave “little detail” to include Bolger as an adviser beyond his familiarity with the firm. Bolger, who previously served as chief financial officer of Royal Bank of Canada and held chief financial positions at Bank of America, served as chief financial officer at Celsius for less than six months.
  • David Adler, a partner at law firm McCarter & English, LLP, filed the objection Aug. 2 on behalf of some investors, pointing to the $1.8 billion discrepancy on the company’s balance sheet and previous statements. on the alleged liquidity of Celsius by Bolger as factors that outweighed his knowledge of the company’s operations. Adler said the company’s justification for the request “reflected a level of callous indifference to Celsius’s customers” in a previous interview.

Overview of the dive:

The withdrawal comes about a week after law firm Kirkland & Ellis filed the initial request to bring Bolger on as counsel on July 25, proposing a monthly fee of $92,000 for the former’s expertise. Chief Financial Officer during Celsius’ Chapter 11 bankruptcy proceedings.

Adler said in a LinkedIn post that he was “pleased the debtors withdrew the motion and the estate will save $94,000/month.”

Bolger, who told the cryptocurrency company of his departure on June 30, received an annual base salary of $750,000 while at the company’s financial headquarters, with up to eight weeks of severance pay. departure on condition that he gave the company eight weeks’ notice by his employment agreement. Bolger also continues to be an employee of Celsius, according to the company’s filing.

It is unclear whether Bolger would have received a monthly stipend of approximately $62,000 per month in addition to monthly consulting fees of $92,000 if the company’s motion to include him as an advisor had been approved. .

Court filings show Celsius owes customers about $4.7 billion, reporting liabilities of $5.5 billion with total assets of $4.3 billion.

The company is one of many cryptocurrency companies struggling following the crash of stablecoins such as Luna and a subsequent drop in the value of crypto earlier this year: another cryptocurrency company Voyager also filed recently for Chapter 11 bankruptcy following a delinquent loan to Three Arrows Capital.

Developments in the field of cryptocurrencies have also caught the attention of lawmakers. Senator Elizabeth Warren D-MA recently asked the Office of the Comptroller of the Currency (OCC), the Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) coordinate on an approach to cryptography and the banking system in a way that “protects consumers and the safety and soundness of the banking system” in a draft letter, following previous OCC moves in the sector.

Celsius did not respond to requests for comment.

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