Shoba Pillay, the Examiner appointed in Celsius’ bankruptcy cases, filed her interim report on November 19, 2022. The Celsius Examiner’s report provides some important insight into a crypto-exchange’s operational and risk management failures which may provide investors and creditors some insight into what to expect in FTX.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of November 14, 2022.

Another domino has fallen. Earlier this year, we wrote about the challenges facing the crypto industry that resulted in the bankruptcy filings of Three Arrows Capital, Celsius Network, and Voyager Digital. We noted that other crypto entities could also end up in chapter 11, and that prediction has proven correct.

The COVID-19 Pandemic hit the travel industry hard. Borders were closed, airline fleets were grounded, travel bookings were cancelled, and travel agents were overwhelmed with customers wanting refunds.

Many travel agents closed their doors because travel bookings dried up.

STA Travel was one. Across 27 stores in Australia, STA Travel operated as a travel agent, booking travel for customers as agent for travel providers, mainly airlines and tour operators.

Second Circuit Denies Appeal of Windstream Debtors’ Confirmation Order on Equitable Mootness Grounds

Bankruptcy is a formal process geared toward preserving stakeholder value. Often, the proceedings include negotiations between stakeholders that are arduous, time-consuming and expensive. Positioning the company for healthy and sustainable growth is often viewed as a postemergence priority, as companies naturally prioritize the near-term financial realities threatening their very survival. 

Bursting the Crypto Bubble and the Financial Turbulence Ahead With the FTX Group’s recent Chapter 11 filing, on the heels of the recent Celsius Network LLC Chapter 11 filing, we have entered what could be described as a “Lehman Brothers moment” for the crypto industry. This observation, together with the recent awarding of the Nobel Prize in Economics to former Federal Reserve chair Ben Bernanke and professors Douglas Diamond and Philip Dybvig for their pioneering research on banks and financial crises, has caused some of us to experience a déjà vu moment.

Crypto investors were dealt another blow on November 11 when FTX, the world’s second-largest cryptocurrency exchange, filed for chapter 11 bankruptcy relief in the District of Delaware, along with more than 130 related companies and affiliates. The bankruptcy was spawned by liquidity issues brought on by the sudden collapse in value of FTX’s crypto assets. Starting on November 6, customers simultaneously attempted to withdraw their funds and assets from the exchange, causing a situation akin to a classic bank run that led to an estimated $32 billion in value quickly evaporating.

Bankruptcy is a formal process geared toward preserving stakeholder value. Often, the proceedings include negotiations between stakeholders that are arduous, time-consuming and expensive. Positioning the company for healthy and sustainable growth is often viewed as a post- emergence priority, as companies naturally prioritize the near-term financial realities threatening their very survival.

Setting aside a transaction on the basis that it was an extortionate credit transaction under the Insolvency Act 1986 (IA 1986 or the “Act”) is difficult. A bargain may be hard or even unreasonable, but that does not make it extortionate. The most important term to any credit transaction is usually the interest rate and that is most likely to be subject to scrutiny when considering whether or not a credit transaction contained grossly exorbitant terms.