Bankrupt crypto lender Celsius drops plans to rehire ex-executive at $93,000 a month

Cryptocurrency lender Celsius, which declared bankruptcy last month, dropped a demand to pay a former executive $93,000 a month while it pursues legal proceedings.

Celsius filed for bankruptcy in July with about $167 million in cash and assets worth $4.3 billion, while owing users about $4.7 billion, according to bankruptcy filings. The company froze user accounts on June 13 as the value of cryptocurrencies plummeted and many investors tried to withdraw their funds.

Shortly after the filing, Celsius sought permission from a judge to pay its former chief financial officer, Rod Bolger, approximately $93,000 per month (C$120,000) while the bankruptcy is resolved. The company filed its request to hire Bolger as a consultant on July 25, citing the “need for stability” and “institutional knowledge and experience regarding the unique characteristics of cryptocurrency.”

On August 5, Celsius lawyers withdrew the request in a court filing after a backlash from some Celsius clients, who expressed anger at what they saw as a cash grab by executives. untrustworthy. More than 100 investors have written directly to Judge Martin Glenn, who is overseeing the case – some arguing for their lost funds to be returned and others accusing Celsius executives of criminal conduct.

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“[T]he lives of thousands of individuals were destroyed under the actions of [Celsius]”, wrote attorneys for investor Keith Suckno. “Before debtors cavalierly pay an insider nearly $100,000 a month, more information should be demanded from debtors, including exactly what services will be required of Mr. . Bolger, why these services cannot be provided by other employees.”

“This company charges more per month than the average citizen earns in a year!” wrote Celsius investor Mario Foti. Foti, who says he is a disabled Afghanistan war veteran, said he turned to Celsius for fundraising as he struggled to find a job.

“I’ve been saving for years to raise the amount I had in degrees Celsius,” he said. “This is gross negligence and a total disrespect to the people who have lost their livelihoods because of this. I pray that the justice system does its job and does not allow the rich to continue robbing the poor .”

It’s not uncommon for a bankrupt company to offer a lucrative salary to an existing or former executive to help oversee its court-supervised reorganization. But such expenses can leave less money to distribute to creditors.

A representative for Celsius did not immediately respond to a request for comment.

“State of Fear”

Meanwhile, many Celsius investors said they lost substantial savings on the platform.

“I have been in a state of fear, depression, anxiety, despair at the thought of losing so much of my savings,” wrote Lindsey Derence, a 72-year-old woman who said she lost weight. money by investing in the business.

After years of hoarding cryptocurrency, Derence said she hopes to build up her holdings until she can use the money to pay off her mortgage. “I was a depositor who thought I was depositing my cryptos in a secure digital bank,” she wrote. “I beg you to join us and recover our misappropriated deposits from this criminal.”

Samuel Degregori wrote that he lost $15,000, roughly the bulk of his savings. “I am ashamed, humiliated and frankly disgusted to have put all my trust in a company that clearly participated in quasi-fraudulent activities. I will spend years trying to recover the money that I have lost”, a- he writes.

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