Hodlnaut seeks judicial management in order to avoid a forced liquidation which would mean the dissolution of the company. The company is hoping that once approved, the judicial management (and appointed judicial manager) will help it handle the ongoing liquidity problems and prevent a forced asset sale, during the abysmal market at the moment.

Hodlnaut Seeks Judicial Management To Avoid Forced Liquidation

The cryptocurrency lender announced to its consumers on Tuesday that they have requested to be placed under judicial administration by the Singapore High Court. Company statement is as follows:

“We are aiming to avoid a forced liquidation of our assets as it is a suboptimal solution that will require us to sell our users’ cryptocurrencies such as BTC, ETH and WBTC at these current depressed asset prices. Instead, we believe that undergoing judicial management would provide the best chance of recovery.”

A law in Singapore called judicial management enables financially challenged companies to recover. In accordance with this law, the court selects an official known as the judicial manager for the struggling firm who temporarily assumes control from the director.

A judicial manager may be appointed after many months. The business may submit an application to name an interim judicial manager to serve temporarily in the same position until the court rules.

Judicial Manager Suggestions

Hodlnaut has suggested Tam Chee Chong as the interim and ultimately judicial manager. Tam Chee Chong is the director of the financial consulting business Kairos Corporate Advisory.

According to the cryptocurrency lender, Chong has over four decades of expertise in corporate financial counseling and has served as a judicial manager for a number of businesses that have undergone reorganization. The message stated:

“With his experience and track record, we believe he will be able to execute our recovery plan and restructure the business effectively.”

The business has set August 19 as the next deadline for further updates on its judicial management application as the application has not yet been heard by the court.

If passed, the act would also temporarily shield Hodlnaut from lawsuits and legal actions, which, in the words of the corporation, would provide them breathing room to concentrate our efforts on the recovery plan to restore the company.

As a result of the cryptocurrency contagion brought on by the collapse of TerraUSD Classic (USTC) and driven by the bankruptcy of the multibillion-dollar crypto hedge firm Three Arrows Capital, Hodlnaut became one of several lenders to lose money on cryptocurrencies.