Creditors of Ionic Digital, a crypto mining firm linked to Celsius, are considering liquidating the company due to delays in its public listing plans.
Ionic Digital Inc, a crypto mining company connected to Celsius Network, is under pressure from some creditors who are considering liquidating the firm. This decision resulted from several setbacks and continuous delays in its plan to go public.
The initial plan was to get Ionic listed on the Nasdaq Stock Exchange by the middle of this year. Unfortunately, that has yet to occur as some events have disrupted the plan. This includes the resignation of auditor RSM US in May. Adding to that was also the departure of the former Chief Executive Officer Matt Prusak earlier this month after his contract expired.
Joseph Sarachek, a lawyer representing some Celsius creditors, told the court that numerous shareholders have expressed interest in forcing a liquidation of Ionic’s assets. More so, another creditor noted that other shareholders are moving to gain support in removing Ionic’s board of directors.
Ionic lawyer Gregory Pesce responded to the potential liquidation by assuring the court that the company is financially stable. He further backed up his claim by revealing that the company’s cash flow remains positive, as it has about $200 million in cash and cryptocurrency.
Pesce argued during the hearing that no shareholder or group of shareholders has up to the necessary voting power to force any sale or board change and that the company isn’t engaged in any merger or acquisition activities.
Addressing the issue of listing, Pesce said Ionic is now planning to go public sometime in 2025. However, the process of hiring a new auditor will still go on for more weeks. An auditor is necessary to complete the public listing process.
Celsius Network Bankruptcy Proceedings and the Impact of Ionic’s Issues
Ionic was formed to pay back creditors following Celsius Network’s bankruptcy. The company has been creating Bitcoin mining facilities in Ward County, Texas; however, it has only been successful in completing one building out of its initial plan to construct four buildings for its mining operations.
Some creditors have criticized this process. They have complained about the slow development and the board’s lack of experience in the crypto-mining field. These mining operations are very important for Ionic to make money and pay back former Celsius customers. However, the delays have made some shareholders think otherwise, and they think selling off assets might be a quicker way to get their money back.
Celsius Network has continued to progress in its bankruptcy proceedings repayment plan. The company’s bankruptcy administrator has been able to distribute over $2.53 billion to about 251,000 creditors, which means it has settled two-thirds of its eligible creditors. However, around 121,000 creditors are still awaiting their distributions, many of whom have smaller claims.
The problems with Ionic’s future have made the Celsius bankruptcy process more complicated. The issues with the mining company might affect how money is given to the other creditors.
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