Friday, October 7, 2022

Hodlnaut Request Judiciary Management From Singapore High Court

Troubled crypto lending firm, Hodlnaut has requested judiciary management to help it deal with its ongoing liquidity crisis.

Following the filing, the Asian crypto lender announced the update Today. The application sent to the Singapore High Court is to avoid forced liquidation of assets in the prevalent crypto winter. 

Based on the Hodlnaut website, judiciary management is an instrument of repair under the Singaporean law. Financially distressed firms opt for this option when they are seeking protection from creditors and against liquidation.

As part of the judiciary management, an officer from the Court recognized as Judiciary Manager is appointed to manage the affairs of the company. The independent officer is chosen to replace the company’s directors pending when the judiciary management process elapses.

Additionally, the beleaguered entity is provided with a moratorium which is a temporary pause preventing creditors to file legal claims. For Hodlnaut, the moratorium will serve as a breather from its numerous creditors. It will also afford it the allowance to concentrate on the restructuring and rehabilitation of its firm.

Presently, the Judiciary Manager to replace Hodlnaut directors has not been appointed. Pending when a choice is finally made, an acting Manager may be appointed to oversee the rehabilitation process. Hodlnaut has its eyes on the current Director of Kairos Corporate Advisory Pte Ltd, Mr. Tam Chee Chong, and is bidding for him to be the acting Manager.

Hodlnaut Sees Judiciary Management as Best Bet to Recovery

The Asian lender sees forced liquidation as a ‘suboptimal’ solution that will ultimately require the crypto lender to sell users cryptocurrencies. Digital assets like Bitcoin (BTC), Ethereum (ETH) and Wrapped Bitcoin (WBTC) will eventually be sold at the current market depressed price. Hodlnaut concurs that this will be a loss on its part and that of its users.

Rather than the forced liquidation, the distraught crypto lender believes that the judiciary management offers a better chance at recovery. Earlier, Hodlnaut had paused withdrawal and deposits on its platform presenting the scorching market conditions as the reason for the move.

Similar to the judiciary management plans, the Asian crypto lender regarded the withdrawal suspension as important to the restructuring process. Damodara Ong LLC, a Singaporean law firm was saddled with the responsibility of a rehabilitation proposal.

Victoria Nye
A Blockchain columnist who is enthusiastic about developing a network interface between the real world and the cryptosphere.

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