Celsius withdraws motion to hire CFO back at $92,000 per month
Embattled Cryptocurrency lending platform Celsius has withdrawn its motion to bring back ex-CFO Rod Bolger at $92,000 per month, prorated over a period of at least six weeks, according to a court paper filed in the Southern District of New York on 5th August. The notice of withdrawal came just ahead of a hearing scheduled for 8th August to review it.
While Bolger functioned full-time with the firm as CFO, the original motion signals that he had a base salary of $750,000 and a performance-based cash bonus of up to 75% of his base salary, in addition to stock options and token options, bringing the maximum of his total income range to around $1.3 million. The court document filing also indicated that Rod Bolger is technically still on the companys payroll.
“On June 30, 2022, Mr. Rod Bolger gave notice to the Celsius Debtors that he was voluntarily terminating his employment,” reads the court document filing. “In accordance with his Termination Notice and the terms and conditions of his Employment Agreement (as defined below), Mr. Rod Bolger is obligatory to give the Celsius Debtors eight weeks notice, which he has done, and he is continuing to serve as an employee of the Celsius Debtors.”
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Had the court motion been accepted, it is unclear whether Rod Bolger potentially would have received his compensation of $62,500 i.e., his base salary per month, in addition to the per month $92,000 consulting fee Celsius had requested. The court document filing also stated that he was continuing to serve as an executive of Celsius, but it also noted that Rod Bolger was “not entitled to any severance compensation.”
The decision to dismiss the motion came three days after CNBC news first reported on the request to enlist the help of Rod Bolger as a consultant during the bankruptcy proceedings. It also follows a formal objection submitted by Keith Suckno, a CPA and investor of Celsius who challenged the move by the company, alleging that “little details” was given for why Rod Bolger is services were necessary to the bankruptcy process.
In the original motion, Celsius mentioned that it needed Rod Bolger to help it navigate the bankruptcy process as an advisor, “because of Mr. Rod Bolger is familiarity with the Celsius Debtors business.” It went on to say that during Rod Bolger is tenure, he led efforts to steady the company is business during turbulent market sentiment and volatility this year, guiding the financial aspects of the company is business and acting as a leader of the Celsius.
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Rod Bolger, who previously worked as CFO for Royal Bank of Canada and divisions of Bank of America, was previously with Celsius for five months before resigning on 30th June, just about three weeks after the crypto lending platform paused all withdrawals.
Rod Bolger is final days at company
In Suckno is objection to bringing Rod Bolger back to guide bankruptcy process, he claimed that Rod Bolger had “misstated the financial condition and liquidity” of Celsius in a company blog post entitled “Get to Know Rod Bolger, Chief Financial Officer, Celsius,” published just five days before the crypto lending platform halted withdrawals due to “extreme market volatility.”
In that post, Rod Bolger said in a print interview that the Celsius “strong liquidity framework, established financial practices around liquidity data, and modeling” were similar to other large financial institutions.
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“This put us in a strong place to bear the recent market volatility and ensure that the users who needed to access their digital assets could get them free and clear,” continued Rod Bolger is quote in the company is blog post. The following Monday, the Crypto lending platform froze all withdrawals and transfers.
In the meantime, just two days after that blog post — and just three days before the company froze withdrawal of customer funds on the platform — Rod Bolger was featured in the company is weekly ask-me-anything show on YouTube, in which he said the Crypto lending platform welcomed regulation.
“We believe in absolute transparency. The Blockchain Technology is about transparency. We are transparent. You know, my aim is for us to be regulated everywhere,” said Rod Bolger in the video.
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“We have voluntarily disclosed a lot of financial information. My goal — even before we are regulated and/or public and required to do so — is to continue building out the tools that are Basel-like...Those are the standards that basically the banks work under,” continued Rod Bolger, adding that the company was already monitoring market risk and operational risk, so that they could “continue to build the level of faith in the community.”
The video was published on Friday, 10th June, and the following Monday, 13th June, the company shut down its on-and-off ramps to client funds. Celsius owes its clients around $4.7 billion, according to its bankruptcy filing.
After Rod Bolger is a departure from the position of CFO, Celsius subsequently installed Chris Ferraro, then the head of financial planning, analysis, (FPA) and investor relations for the company. Just within days of his appointment, the company filed for bankruptcy proceedings.
Once a titan of the Cryptocurrency lending world, Celsius now faces charges that it was running a Ponzi scheme by paying early depositors with the money it got from new clients.
At its peak in October of 2021, CEO Alex Mashinsky said that the Cryptocurrency lender had $25 billion in assets under management (AUM). Now, Celsius is down to $167 million “in cash on hand,” which it is sure that will provide “ample liquidity” to support its operations during the restructuring and bankruptcy process.
That filing also indicates that Celsius has more than 100,000 creditors, some of whom lent the Cryptocurrency Platform cash without any collateral to back up the arrangement. The list of its top 50 unsecured creditors includes Sam Bankman-Fried is trading firm Alameda Research.
Retail investors have also filed pleas to the judge to help them recover some of their lost holdings, with some saying that their life savings have effectively been wiped out.
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