While a recent document indicates that Celsius would be twice as indebted as it had indicated at the time of its bankruptcy filing, the company nevertheless obtains the authorization of the judge to resell the Bitcoins (BTC) that it mined itself.
Celsius will be able to sell its mined Bitcoin
On Tuesday, August 16, the various parties involved in the bankruptcy proceedings of Celsius met to discuss the operations of the company in the context of potential restructuring.
This included payment arrangements for the company’s taxes and fees, insurance costs, claims against suppliers and legal fees.
Martin Glenn, the judge in charge of the case, granted Celsius permission to resell its mined Bitcoins (BTC) in order to pay its debts.
However, he expressed reservations about the short-term profitability of mining, given the current state of the cryptocurrency market. To this, Celsius responded that the price of Bitcoin has seen a 25% increase since the company filed its initial request.
It should be noted, however, that this authorization is limited exclusively to Bitcoins mined by Celsius with its own hardware. The latter remains unable to sell equity investments and will have to provide detailed information as to its production and sale.
Significant setup costs
Before declaring bankruptcy, Celsius was already mining Bitcoin in order to resell it. However, once the proceedings began, the company was momentarily unable to resell these assets.
According to a document filed at the hearing, Celsius mined a total of 432.3 BTC in July alone, but this was not enough to offset the company’s operational costs. Also, although the short-term profitability of the mining is proving to be loss-making, the judge wanted to give the company a chance.
Celsius’ defense lawyer, Ross Kwasteniet, explained that the company’s mining activities had only started last year and that some installations were still in progress, and even some machines were still awaiting delivery, hence its deficit in this sector of activity.
It also says that Celsius’ mining operations are a “core business” of the company, and that the company expects its financial condition to improve within the next few months.
The Texas Financial Supervisory Authority as well as lawyers for various creditors, who had previously been opposed to the sale of Celsius’ mined Bitcoins, have finally given their approval in light of the various information provided, which they finally feel is up to snuff.
More difficulties than expected for Celsius
While the initial bankruptcy filing by Celsius mentioned a deficit to the tune of $1.2 billion, a new report on Sunday, August 14, indicates that the company’s actual debt is $2.85 billion, more than double.
According to the new document, Celsius has net liabilities of $6.6 billion and a total of $3.8 billion in assets under management, which is a far cry from what was originally reported.
The document, filed by Kirkland & Ellis, indicates that Celsius could run out of funds by October. It could exhaust its $130 million cash position by that deadline, according to the forecast.
All expenses added up, the company would have a $40 million cash hole.
