Following the suspension of customer withdrawals last week, Singapore-based Cryptocurrency lender Hodlnaut has listed for creditor protection, giving it more time to recover from its financial difficulties.
The Crypto lender is pursuing judicial management to provide it with temporary protection from any legal proceedings and claims, which it believes will give it “breathing space” to concentrate on its recovery plan. In Singapore, judicial management is a law that allows financially troubled businesses to rehabilitate themselves.
Hodlnaut briefed its users on Tuesday through an announcement that they had filed for creditor protection with the Singapore High Court. To begin, the application will keep the company from having to sell assets to make up the shortfall on its books. According to the company: We intend to avoid forced asset liquidation because it is a suboptimal solution that would require us to sell our users’ Cryptocurrencies like BTC, ETH, and WBTC at these current depressed asset prices. Instead, we believe that going through judicial management will give the best chance of recovery.
Second, the filing puts any legal claims against Hodlnaut on hold for the time being. The statement goes on to say: This pause will allow us to concentrate our efforts on the improvement plan to rehabilitate the company.
The statement also mentioned the affected users, saying: While Hodlnaut is currently in a difficult financial situation, not all of your assets have been lost.
The court appoints a judicial manager for the firm who takes over control from the director of the company for the duration of protection. Tam Chee Chong, a director of the financial consultancy company Kairos Corporate Advisory, has been recommended by Hodlnaut as the interim judicial manager.
According to Hodlnaut, Chong has almost 40 years of experience in corporate finance advisory and has served as judicial manager for companies undergoing restructuring on multiple occasions. According to Hodlnaut’s announcement: We believe that with his experience and track record, he will be able to effectively execute our recovery plan and restructure the business.
As of now, the court has not heard the application, and Hodlnaut has set August 19 as the next date for further updates on the status of their filing.
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