Chapter 11 𝐛𝐚𝐧𝐤𝐫𝐮𝐩𝐭𝐜𝐲 explained

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐂𝐡𝐚𝐩𝐭𝐞𝐫 11 𝐛𝐚𝐧𝐤𝐫𝐮𝐩𝐭𝐜𝐲??

A few weeks ago,crypto funds #CelsiusNetwork and #VoyagerDigital filed for Chapter 11 𝐛𝐚𝐧𝐤𝐫𝐮𝐩𝐭𝐜𝐲.
But what the heck is Chapter 11 𝐛𝐚𝐧𝐤𝐫𝐮𝐩𝐭𝐜𝐲???

photo credit: twitter

Here's a simple primer👇👇

This Chapter of the Bankruptcy code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.

This means customer deposits will be paid back last if at all.(the sad part)

A statement from Celsius, "This decision was made with the intention to provide the best opportunity to stabilise the business,consummate a comprehensive restructuring transaction that maximises value for all stakeholders,and emerge from chapter 11 positioned for success in the crypto industry".

Celsius network had a $1.2 billion hole in its balance sheet
Voyager had massive partnership with 3 Arrows capital which had $10billion AUM
Among other companies

With the #Luna cascade aside,this was another black swan event that led to massive capitulations in #crypto.

#olphcapital twitter