Celsius Hires Kirkland and Ellis LLP to Assist in Restructuring
Celsius Network has been experiencing troubles for a while, but the company is dedicated to reviving itself. To gain credibility in the market again, it is employing the services of legal experts.
As per a report from the Wall Street Journal, Celsius has hired Kirkland & Ellis LLP, a legal firm, to assist the company with restructuring. For context, restructuring is a legal process that seeks to reorganize a firm and repay its debts. This might include changes to the board, mergers, and other solutions.
Kirkland & Ellis LLP replaces Gump Strauss Hauer & Feld LLP, a legal firm that Celsius had hired to ease their liquidity crunch.
How Celsius Landed in Trouble
Before the slump, Celsius was doing well for itself. Most of the company’s business relied on lending crypto. The exchange offered high interest rates to the liquidity makers who committed their funds.
Much of Celsius’ business was closely associated with Lido. Celsius held a substantial amount of stETH. Each stETH can be redeemed for 1 ETH, once the Proof of Stake upgrade happens. So when the panic about ETH2.0 broke out, stETH lost its peg, the prices dropped, and Celsius faced a liquidity crisis.
As Celsius found it difficult to process mass withdrawals, it had to halt withdrawals. This, in turn, caused CEL’s prices to drop. From this point onwards, Celsius has been trying to recover and get back on its feet.
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Celsius is Trying to Get Back on Track
Following the collapse of TERRA/LUNA, the shaken peg of Lido’s stETH token, and the overall pessimism in the market, Celsius started facing financial turmoil.
But unlike Three Arrow Capital and other companies that gave in to the crisis, Celsius has been taking serious measures to recover. To date, Celsius has paid off millions of debt. Notably, the crypto company cleared $120 million in debt to Maker.
In an order to use its resources more efficiently, the company has laid off employees in non-strategic areas.
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