Cash strapped cryptocurrency lender Celsius Network wishes to bring back former CFO Rod Bolger and pay him $92,000 per month
Celsius Network is seeking the services of its former chief financial officer (CFO) Rod Bolger to help it during its Chapter 11 (bankruptcy) proceedings in the United States.
One day after Vermont’s financial regulator warned that Celsius was “deeply insolvent”, the cryptocurrency lender initiated voluntary Chapter 11 proceedings at the US Bankruptcy Court for Southern District of New York.
It came after Celsius Network in June froze all withdrawals, swaps, and transfers between customer accounts, citing “extreme” conditions.
Celsius said at the time of its Chapter 11 declaration that it had $167 million in cash on hand.
But it had more than 100,000 creditors and owed around $4.7 billion, according to its bankruptcy filing.
Celsius had been one of the biggest crypto lending platforms with a market value (before Chapter 11) of $12bn.
At its peak in October 2021, the crypto lender reportedly had $25 billion in assets under management.
The firm allowed users to lend out their tokens as collateral for other crypto projects in exchange for annual yields of up to 17 percent.
But troubles began after investor interest in such high-risk areas dropped off following the collapse of the TerraUSD “stablecoin” in early May, which along with the Luna coin, was linked to a similar high-yield scheme.
Celsius’ business model, like that of Terra, in which it was an investor, depended upon a steady flow of new entrants feeding the system, or borrowing to pay the high rates.
But some critics likened this business model to a pyramid scheme.
Now CNBC has reported that Celsius wants to bring back ex-CFO Rod Bolger, and that it wants to pay him about $92,000 a month, prorated over a period of at least six weeks.
Celsius reportedly says it needs Bolger to help it navigate bankruptcy proceedings as an advisor, according to a motion filed with the Southern District of New York.
“Because of Mr. Bolger’s familiarity with the Debtors’ business, the Debtors have requested, and Mr. Bolger has agreed pending the Court’s approval, to continue providing advisory and consulting services to the Debtors pursuant to an Advisory Agreement,” the filing reads.
“In consideration for the advisory services rendered by Mr. Bolger, the Debtors agree to pay Mr. Bolger the sum of CAD $120,000 per month, prorated for partial months.”
The motion went on to say that during Bolger’s tenure, he had led efforts to steady the business during turbulent market volatility in 2022, guiding the financial aspects of the business and acting as a leader of the company.
The decision whether Bolger can be hired on that salary rests with New York’s Southern District court, and a Zoom hearing is reportedly scheduled for Monday 8 August to consider the motion.
Bolger is a former CFO for Royal Bank of Canada and divisions of Bank of America, and had been with Celsius for five months before resigning on 30 June, about three weeks after the platform paused all withdrawals.
When he worked at the lender full time, he was paid an annual base salary of $750,000 and a performance-based cash bonus of up to 75 percent of his base, in addition to stock and token options.
This brought his total maximum income range to around $1.3 million, CNBC reported.