Coin Edition -
- Ben Armstrong questions the assumption of money reappearing on Celsius Network’s balance sheet.
- Recovery projections for Celsius Network are likely to be limited, with a potential net recovery range of $400 million to $800 million.
- Court documents reveal that Celsius Network did not properly record intercompany transactions.
Bitboy Crypto founder Ben Armstrong replied to a tweet by Thomas Braziel addressing the recovery projections for Celsius. He questions, “LMAO do you know how many years it will take to recover this? “
LMAO do you know how many years it will take to recover this? You think the money just magically appears back on the balance sheet?No one is free and willingly handing money back. NOT TO MENTION, the people with $1M+ are the people who can fight the longest. https://t.co/pHsq5OyjlG— Ben Armstrong (@Bitboy_Crypto) February 22, 2023
According to Armstrong, the assumption that money will simply reappear on the balance sheet is not accurate. Additionally, it is unlikely that individuals will willingly return funds. Furthermore, it is important to note that those with a net worth exceeding $1 million are likely to have the resources to sustain prolonged legal battles.
Meanwhile, the 507 Capital CEO, Thomas Braziel, had shared that there are individuals who have projected a significant recovery from preferences being pursued. However, it is important to acknowledge that the additional net recovery, after the cost of factoring, is likely to be limited.
Based on the current estimates, Braziel said the maximum amount of additional net recovery is expected to be around $500 million. This is calculated by taking into account a potential recovery rate of 10-20%, after which one-third of the recovered amount would go toward attorney fees. Therefore, the net recoveries would range between $400 million to $800 million.
Braziel adds:
And remember, you have to add the 500m to the numerator and the demonstrator.. given that when you pay in a pref you get a claim for the cash paid in.
Moreover, court documents filed by bankrupt crypto lender Celsius Network reveal that they did not properly record transactions among their affiliate companies, making it difficult to determine intercompany claims accurately.
The documents, which were submitted in response to a court order from a New York bankruptcy court, demonstrate that the $9.1 billion intercompany claim that Celsius Network LLC held against its affiliates, Celsius Network Limited, did not take into account the lack of proper record-keeping, which included roughly 7,000 unrecorded transactions between the two entities in the three months prior to the bankruptcy filing.
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