Kirkland & Ellis brings insolvency know-how for crypto victims

Kirkland & Ellis has developed into a leading law firm in the United States when it comes to restructuring bankruptcy companies. One of the reasons can be the way PowerPoint is used.

In the crucial hearings on the "first day", when a judge of the Federal Avuly Court is commissioned and the case begins, Kirkland usually keeps a slide presentation in which the basic facts are presented to explain the company and its crisis to the court.

But it is even more important that this unusual font and graphics routine, which is not considered a formal proof, indicates the sound and the narrative for how the law firm wants to develop the case for its client.

These powerpoints suddenly get more attention. Kirkland represents two top -class cryptocurrency companies, Voyager Digital and Celsius Holdings, who have applied for protection according to Chapter 11 in the past few weeks.

On the opening day every case Kirkland presented its usual slide decks, both of which are open to the public. The general topics of both are the same.

Both Voyager and Celsius succumbed to the "crypto winter". However, both have valuable assets and prospects that should enable account holders to maximize their returns on their currently frozen accounts by reorganization and not by liquidation.

In the case of Voyager, Kirkland has already submitted a design proposal for a new voyager, which will be publicly traded and owned by checking account doors. The options for Celsius are less clear, but a permanent lawyer said in court: "We believe that we have some valuable assets that we have to reorganize."

It may be a controversial point that these companies could or should be revived because they have just been imploded after both have described a “run on the bench” in their files.

"Every financial relationship depends on trust," said Vincent Indelicato, lawyer for insolvency law at Proskauer Rose. "Once you've lost it, you may never win it back."

But no law firm has a better track record in solving difficult tasks than Kirkland & Ellis. The cases Voyager and Celsius are the unique challenge of answering new legal questions about the basic nature of crypto and examining the behavior of the companies before bankrupt

The emergency of the two companies is relatively simple. Both accepted crypto payments from thousands of customers. These customers were promised double-digit annual yields, while the companies took their deposits and used them for risky bets who became acute at Krypto and the token prices collapsed this year.

Celsius, for example, announced that at the time of his bankruptcy application, it had liabilities of $ 5.5 billion, but only $ 4.3 billion. They each imposed "goals", which prevented account holders from lifting their crypto. Weeks later the bankruptcy application followed.

The effects on people become clear, since the public legal files in any case fill with letters from account holders to the respective judges in which they are wondering why they cannot access their stocks and explain the damage to their lives.

A legal question for insolvency cases is whether account holders have a direct claim to the specific cryptocurrency that they deposit in their accounts, or whether they are classified as a generic unsecured believer with a claim to the company's remaining wealth pool (the latter is the obvious consensus for the time being).

The advantage of the US insolvency system is that everyone involved has a voice. Creditor committees are formed. The Ministry of Justice weighs up. Judges must approve reorganizations after investment bankers have testified on reviews.

Nevertheless, a large part of this choreography can be managed by the debtor's law firm, which is commissioned by the company, but is supposed to work for the benefit of everyone involved. The tensions, too subtle for a two -dimensional PowerPoint, will soon become clear enough.