US Trustee motions for examiner to probe Celsius’ ‘significant transparency issues’
The United States Trustee handling Celsius’ bankruptcy proceedings has called for an independent examiner to be brought in to “untangle” the embattled network’s financial affairs and business operations.
In a motion filed on Aug. 18 to the United States Bankruptcy Court by William K. Harrington, the US Trustee has asked for an examiner to look into allegations of “incompetence or gross mismanagement” as well as “significant transparency issues” surrounding Celsius’ operations in the context of the bankruptcy case.
Examiners are appointed by bankruptcy courts to investigate details of complex cases brought before them. They are able to 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.
According to the motion, 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 also mentioned that an examiner would be able to determine 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.
Related: Celsius CEO personally directed crypto trades months before bankruptcy: Report
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