Hodlnaut Judicial Managers Release Circular to Creditors After Plea to Remove Them

In an update on Oct. 12, the judicial managers of troubled crypto lender Hodlnaut released their sixth circular to creditors.

In the update, the interim judicial managers refer to a previous application filed by the company’s claimed creditor to remove them and appoint its last nominee, Tam Chee Chong, of Kairos Corporate Advisory Pte Ltd., as the IJM.

Plea to change managers

The circular noted, “After hearing from the parties, the Court stated that there were two possible ways for the matter to move forward.”

The appointed IJMs shall contest the plea filed by Simon Lee. For this, the IJMs will file their report by 27 October 2022 and circulate the same to the creditors; the creditors can file their reply affidavit by 24 November 2022.

A Singapore court placed  Hodlnaut under judicial management back in August by appointing Ee Meng Yen Angela and Aaron Loh Cheng Lee, of EY Corporate Advisors, as the interim judicial managers (IJM). The decision came weeks after the troubled crypto lender sought protection from creditors after halting withdrawals amid a liquidity crisis.

Hodlnaut exchange freezes salaries

Amid the liquidity crisis, the exchange reportedly fired 80% of its workforce or around 40 employees. A report by Tech in Asia has now found that former Hodlnaut employees were informed that the company is “not in a position to make any payment” on their salaries, benefits, or entitlements.

These dismissed staff members were reportedly told that the IJM is seeking legal counsel on the payments and would update them “in due course.”

Former employees told the news outlet that they still await their final settlement from the troubled crypto lender. We know from the report that the firm collected proof of debt forms from the employees to “provide supporting documents and calculations used to derive the claimed amount” for their salaries.

Notably, Hodlnaut blamed its losses on the TerraUSD crash, exceptionally high withdrawal volumes, the general decrease in cryptocurrency prices from their peak in 2021, and issues with specific users who had sizable deposits.

The exchange previously stated that in due course, “The plan is aimed at restoring our asset-to-debt ratio to at least 1 and eventually allowing users to withdraw the full value of their cryptocurrency deposited with Hodlnaut.”