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Celsius has hired Kirkland & Ellis for the restructuring process. Sources said that Celsius is not willing to file for bankruptcy as per the wish of its retail clients.
Celsius Network, the embattled crypto lender, has been currently staring at bankruptcy. As per the latest WSJ report, Celsius has dried a new counsel to advise it for possible restructuring.
Celsius Restructuring Plans
On Sunday, July 10, the Wall Street Journal reported that Celsius has replaced its lead restructuring counsel with lawyers from Kirkland & Ellis. Sources familiar with the matter said that the lawyers have advised Celsius on options including a bankruptcy filing.
The troubled crypto lender had previously hired lawyers from Akin Gump Strauss Hauer & Feld LLP. Kirkland & Ellis are also representing troubled crypto broker Voyager Digital, which filed for Chapter 11 bankruptcy last week.
With Celsius Network facing a major liquidity crisis due to the crypto market crash, it has yet to share the path forward. The company has been exploring restructuring options and talking to several lawyers. On the other hand, the company has also appointed banking giant Citigroup for advice about financing options.
Owing to a massive correction in the crypto market, Celsius has already stopped withdrawals on the platform. On June 30, Celsius Network noted in a blog post saying that it is taking necessary measures “to preserve and protect assets”. The blog post noted:
“These options include pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues. These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines.”
Will Celsius File for Bankruptcy?
Just like Voyager Digital, the talk in the crypto town is that Celsius Network could be filing for Chapter 11 bankruptcy very soon. The Chapter 11 bankruptcy allows the company to continue its operations while simultaneously meeting its financial obligations to indebted parties.
This happens with the troubled company proposes a plan of reorganization. The creditors later choose to approve this plan overseen by a legal team. However, the firm has been hesitant about the approach and looking to approach the lengthy bankruptcy proceedings.
As per sources, Celsius believes that much of retail clients want to avoid bankruptcy proceedings. Users can further extend support by using the “HODL Mode” in their Celsius accounts. This is a security feature that when activated keeps users from withdrawing or sending funds.