The court document said, “The Debtors did not generally record prepetition intercompany transactions in their books and records contemporaneously with such transfers, and in many cases did not record intercompany transactions at all.”
A court filing claimed that Celsius' debtors did not record many transactions between its affiliate firms.
According to the document, Celsius’ shortfalls in record keeping have created a backlog of unaccounted-for transactions.
It never ceases to amaze me the level of incompetence and ineptitude that made up Celsius. How do you manage billions in intercompany lending without tracking the transfers, incorrectly value the assets moving, etc? This goes far beyond simple mistakes. pic.twitter.com/BORWQpHDUT
— Keith (@ChazzonKe) February 17, 2023
It stated that Celsius Network LLC’s $9.1B claim against Celsius Network Limited (CNL) did not include 7,000 transactions between the two entities in the months before Celsius filed for bankruptcy.
The filing’s statements were a response to a court order dated February 9. The order directed Celsius’ debtors to provide details on intercompany claims.
It also revealed that LLC and CNL entered into an Asset Transfer Agreement in late 2021. The number of intercompany claims related to the agreement remains unknown.
The debtors and financial advisor A&M concluded that the claim held by LLC against CNL amounted to $3.5B after months of analysis.
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The debtors believe that a full reconciliation of the claims may not be possible due to a large number of unrecorded transactions. The filing added,
“[The reconciliation process] would be a nearly impossible, time consuming, and cost-prohibitive task..... It would be a time and cost intensive forensic accounting exercise that would likely require the engagement of a forensic accounting firm at a significant cost to the Debtors’ estates”
The news came less than a week after the debtors revealed a proposed sale plan.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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