Last updated on March 3rd, 2023 at 05:03 pm
On February 28, the temporary judicial managers of Hodlnaut released the sixth affidavit of co-founder Simon Lee, in which the founder proposed selling the business as a more favourable alternative to liquidation for the benefit of the creditors.
Lee expressed confidence in their capacity to attract and onboard new users to digital asset platforms under the control or influence of these investors. He claimed that such a move would optimize value for creditors, stating that it would be a profitable business transaction.
Lee and co-founder Zhu Juntao have reportedly contacted several potential investors while in search of a white knight to restore their company’s fortunes. The corporation is currently in negotiations with several potential investors to sell its business and assets. In early February, several interested buyers purportedly expressed interest in acquiring Hodlnaut.
This revelation comes after a restructuring proposal presented to major creditors of Hodlnaut, including the Algorand Foundation, in January was rejected. The proposed plan would have enabled the current directors to manage the company’s activities during the reorganization stage.
However, creditors of the cryptocurrency lending firm concluded that the proposed restructuring measures would not be sufficient to resolve the company’s financial issues. They believe initiating a liquidation process to sell the company’s remaining assets would be more effective. By doing so, the creditors would be able to distribute the assets among themselves, thereby maximizing their overall value.
Hodlnaut halted its services in August 2022 due to a liquidity shortage caused by the bear market. The company also had significant exposure to the defunct FTX exchange. They have over 500 Bitcoin trapped in the exchange. The regulatory license application of Hodlnaut was also withdrawn in Singapore, further threatening its operations.
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