Celsius Has Been Billed $3 Million In Legal Fees: Filing
- Troubled crypto lending platform has been billed over $3 million in legal fees by law firms Kirkland and Ellis and Akin Gump despite a severe lack of funds.
- The Celsius Network executives employed Kirkland and Ellis, a law firm, to represent the firm in the U.S. Bankruptcy Court for Southern District of New York.
- Recently, the CEO of the firm Alex Mashinsky resigned, following an investigation which was implemented by the Committee of Unsecured Creditors (UCC).
A troubled crypto lending platform, Celsius Network, that recently filed for Chapter 11 bankruptcy, has been billed over $3 million in legal fees despite a severe lack of funds and a huge hole in the balance sheet of the platform. The firm has not been able to pay off its creditors and there are chances of a sale happening in the near future that would see the proceeds paid to the creditors.
The withdrawals on the platform were halted in June and since then, there has been a strict scrutinization of the practices of the executives at the firm. The Celsius Network executives employed Kirkland and Ellis, a law firm, to represent the firm in the U.S. Bankruptcy Court for Southern District of New York as there was a billion dollar hole in the balance sheet of the token.
As per a court filing on Friday, in between July 13 and July 31, the law firm billed the troubled crypto lending firm over $2.6 million in fees while another legal representative, Akin Gump, charged almost $750,000 for its services between July 13 and August 31 which totals to around $3.5 million at a time when the market is bearishh and the users of the platform have lost faith in the firm.
Celsius paid an interim allowance of $2,570,322.67 for the reasonable compensation for actual, necessary legal services that Kirkland and Ellis (K&E) rendered to the debtors during the above-mentioned period while another $75,002.27 were billed for the actual, necessary expenses that K&E incurred.
Interestingly, the embatted crypto firm has been trying to pay off its debts and turn profitable within the next few months but it seems that this is not possible for now. The CEL token has dropped significantly from its all-time high and the bearish market has taken a toll on its trading volume as well. The users whose funds have been stuck with Celsius are still awaiting withdrawals.
Recently, the CEO of the firm Alex Mashinsky resigned, following an investigation which was implemented by the Committee of Unsecured Creditors (UCC) which represented the creditors of the firm.
“Effective immediately, please accept my resignation as CEO of Celsius Network Ltd, as well as my directorships and other positions at each of its direct and indirect subsidiaries, with the exception of my director position at Celsius Network Ltd,”said Mashinsky in a statement.
The creditors of the Hoboken, New Jersey-based crypto lender believe that the CFO of the firm Chris Ferraro will better serve the firm and claiming that he is a capable leader.