Joel E. Cohen, a mathematician and biologist acting as the valuation adviser for Celsius Network through Stout Risius Ross, has verified the accuracy of the fair value of specific assets and liabilities of the debtors.
After several months of negotiations and discussions, most Celsius creditors have recently approved a plan that would return around $2 billion worth of Bitcoin and Ethereum to the creditors. This development marks a significant step forward in resolving the Celsius Network’s financial situation.
Celsius Reorganization Plan Clears Valuation Hurdle
Celsius Network, which managed over $20 billion in assets at one point, faced challenges due to the crypto bear market in 2022. Ultimately, the company filed for Chapter 11 Bankruptcy in July, a move CEO Alex Mashinsky deemed “the right decision for our community and company.”
After achieving consensus on Celsius Network’s reorganization plan, a court filing on September 28 confirmed the accuracy of the valuation of debtors’ assets and liabilities. Stout Risius Ross conducted the valuations, covering cryptocurrency assets, loans, and alternative investments.
In the declaration submitted to the New York bankruptcy court, Cohen explained the methodologies employed in the valuation analysis and concluded that, based on his work and considerations, he believes the Valuation Report accurately represents the fair value of certain assets and liabilities of the debtors as of May 31, 2023.
According to a disclosure statement filed on August 17, approximately $2 billion will be distributed among creditors, and the plan also includes the allocation of equity in a new entity provisionally referred to as “NewCo.”
Celsius Network’s Financial Turmoil
Initially, Celsius reported a debt of approximately $1.2 billion in the bankruptcy filing. However, a Coin Report suggested the debt could be closer to $2.85 billion. According to the estimations, the company’s net liabilities stood at $6.6 billion, while its total assets under management were $2.85 billion. In contrast, Celsius filed that it held $4.3 billion in assets under management and $5.5 billion in liabilities.
The case garnered controversy when it emerged that CEO Mashinsky withdrew $10 million worth of crypto before Celsius Network halted withdrawals. There were also allegations of Mashinsky inappropriately influencing trading decisions.
Court documents later revealed that Mashinsky, CTO Nuke Goldstein, and CSO Daniel Leon withdrew $56.12 million between May and June from custody accounts in BTC, ETH, USDC, and CEL.
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