Celsius’ transparency issues to be probed by an examiner

Quick Take

• US trustee requests an examiner to inspect transparency issues within Celsius.
• Following the company’s bankruptcy proceedings, the trustee has demanded an audience with an independent examiner.
• The US trustee is currently overseeing the proceedings of the company.

William K. Harrington, a US Trustee, filed a motion on August 18th, 2022 in the United States Bankruptcy Court. The trustee is overseeing the bankruptcy proceedings of Celcius. 

He has requested an independent examiner to probe into the charges of “incompetence or gross mismanagement” accompanied by serious transparency concerns in the context of Celcius’ bankruptcy case.

Bankruptcy courts have the jurisdiction to assign examiners who have the authority to investigate the details of complicated cases. These courts can offer material from a neutral perspective. 

Previously, they have been appointed in bankruptcy cases, including the really high-profile ones. One such case concerned the infamous Lehman Brothers during their subprime mortgage crisis.

As per the application, depending on how intricate the case is, the appointment of an examiner would be beneficial for the parties involved. This is because they can provide information that may supersede the knowledge of the court itself.

Harrington also stated that an examiner can evaluate whether the legal claims should be launched against management, provided there are compelling charges pertaining to severe mismanagement and incompetence.

Harrington also stated that it is possible for an examiner to shift through the enormous amount of material that is available on the internet. These facts often make the reality of Celsius an ambiguous affair. It enables their clients to form their own opinions.