Files Voluntary Petitions for Chapter 11 Protection
Ample Liquidity with $167 Million in Cash to Support Operations
HOBOKEN, N.J., July 14, 2022–(BUSINESS WIRE)–Celsius Network (“Celsius” or “the Company”) today announced that it initiated voluntary Chapter 11 proceedings to provide the Company with the opportunity to stabilize its business and consummate a comprehensive restructuring transaction that maximizes value for all stakeholders. To implement the restructuring, the Company and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (“the Court”).
Members of the Special Committee of the Board of Directors said, “Today’s filing follows the difficult but necessary decision by Celsius last month to pause withdrawals, swaps, and transfers on its platform to stabilize its business and protect its customers. Without a pause, the acceleration of withdrawals would have allowed certain customers—those who were first to act—to be paid in full while leaving others behind to wait for Celsius to harvest value from illiquid or longer-term asset deployment activities before they receive a recovery.”
“This is the right decision for our community and company,” said Alex Mashinsky, Co-Founder & CEO, Celsius. “We have a strong and experienced team in place to lead Celsius through this process. I am confident that when we look back at the history of Celsius, we will see this as a defining moment, where acting with resolve and confidence served the community and strengthened the future of the company.”
Celsius to Continue to Operate
Celsius has $167 million in cash on hand, which will provide ample liquidity to support certain operations during the restructuring process.
To ensure a smooth transition into Chapter 11, Celsius has filed with the Court a series of customary motions to allow the Company to continue to operate in the normal course. These “first day” motions include requests to pay employees and continue their benefits without disruption, for which the Company expects to receive Court approval. Celsius is not requesting authority to allow customer withdrawals at this time. Customer claims will be addressed through the Chapter 11 process.
New Directors to Provide Additional Leadership and Expertise
David Barse is the Founder and Chief Executive Officer of XOUT Capital, an index company, and DMB Holdings, a private family office. Mr. Barse was formerly the CEO of Third Avenue Management for 25 years, a pioneer in fundamental, bottom-up deep value and distressed investing.
Alan Carr is an investment professional with over 25 years of experience building businesses, leading complex restructurings, and protecting and creating value for stakeholders. Mr. Carr is a Founder and the Managing Member of Drivetrain, LLC, a professional fiduciary services firm.
Kirkland & Ellis LLP is serving as legal counsel, Centerview Partners is serving as financial advisor, and Alvarez & Marsal is serving as restructuring advisor to Celsius.
Additional Information about the Restructuring Process
Additional information about the Chapter 11 filing, including Court documents, can be found at https://cases.stretto.com/celsius. Stakeholders with questions may call the Company’s Claims Agent, Stretto, at +1 (855) 423-1530 (U.S.) or +1 (949) 669-5873 (international) or email firstname.lastname@example.org.
Built on the belief that financial services should only do what is in the best interest of the customers and community, Celsius is a blockchain-based platform where membership provides access to curated financial services that are not available through traditional financial institutions. For additional information please visit www.celsius.network.
The statements contained herein may contain certain forward-looking statements relating to the Company that are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. These forward-looking statements are, by their nature, subject to significant risks and uncertainties. These forward-looking statements include, without limitation, statements relating to the Company’s business prospects, future developments, trends and conditions in the industry and geographical markets in which the Company operates, its strategies, plans, objectives and goals, its ability to control costs, statements relating to prices, volumes, operations, margins, overall market trends, risk management and exchange rates.
When used herein, the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “going forward”, “intend”, “may”, “ought to”, “plan”, “project”, “seek”, “should”, “will”, “would” and similar expressions, as they relate to the Company or the Company’s management, are intended to identify forward-looking statements. These forward-looking statements reflect the Company’s views at the time such statement were made with respect to future events and are not a guarantee of future performance or developments. You are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. Actual results and events may differ materially from information contained in the forward-looking statements as a result of a number of factors, including any changes in the laws, rules and regulations relating to any aspects of the Company’s business operations, general economic, market and business conditions, including capital market developments, changes or volatility in interest rates, foreign exchange rates, equity prices or other rates or prices, the actions and developments of the Company’s competitors and the effects of competition in the insurance industry on the demand for, and price of, the Company’s products and services, various business opportunities that the Company may or may not pursue, changes in population growth and other demographic trends, including mortality, morbidity and longevity rates, persistency levels, the Company’s ability to identify, measure, monitor and control risks in the Company’s business, including its ability to manage and adapt its overall risk profile and risk management practices, its ability to properly price its products and services and establish reserves for future policy benefits and claims, seasonal fluctuations and factors beyond the Company’s control. Subject to the requirements of the Listing Rules, the Company does not intend to update or otherwise revise such forward-looking statements, whether as a result of new information, future events or otherwise. As a result of these and other risks, uncertainties and assumptions, forward-looking events and circumstances discussed herein might not occur in the way the Company expects, or at all. Accordingly, you should not place reliance on any forward-looking information or statements. All forward-looking statements herein are qualified by reference to the cautionary statements set forth in this section.
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Lisa Hernández Gioia
C Street Advisory Group
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