Unchained Three Crypto Bankruptcies: 3AC, Celsius and Voyager. What Happens Now?- Ep. 374
Jul 15, 2022
Wasi Lawyer, a skilled restructuring and insolvency attorney, shares his insights into the bankruptcies of Three Arrows Capital, Celsius, and Voyager. He explains the intricacies of the liquidation process and the duties of liquidators. The discussion covers creditor priorities and uncertainties about the whereabouts of 3AC founders. Additionally, he contrasts Chapter 11 and Chapter 15 bankruptcy, detailing the impact on Celsius's account holders and the broader implications for the crypto market amidst economic challenges.
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Liquidation Process
- In a liquidation, a company ceases to exist, unlike restructuring where it can be saved.
- A liquidator, chosen by creditors, sells assets and pays creditors based on priority.
Creditor Priority
- Creditors are paid according to a priority waterfall, with liquidators and lawyers paid first.
- Unsecured creditors share recoveries pro-rata, while secured creditors are paid from collateral.
3AC Asset Overview
- 3AC's assets include cash, liquid crypto, illiquid assets like Luna, locked tokens, and private equity.
- They also hold NFTs and contract rights, including disputed Starkware token warrants.