Creditors Reject Hodlnaut Restructuring Plan
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An editor at Coincrop
13 Jan 2023 | 3 min read
n response to the restructuring plan proposed by Hodlnaut's directors, creditors have adamantly rejected it and are now calling for an immediate liquidation of the company.
On Jan. 11, a filing revealed that creditors of crypto lender Hodlnaut have declined to accept the proposed restructuring plan for the company, according to Bloomberg.
Hodlnaut's interim judicial managers have declared that liquidation is the most favorable path for their interests, based on the report filed with Bloomberg last Friday.
The proposed reorganization plan would have continued to permit Hodlnaut directors, who were in charge when the company failed, to remain at the head of it. One creditor - Algorand Foundation - submitted a filing declaring that liquidation would "maximize assets available for distribution from remaining resources".
In August, Hodlnaut suspended all withdrawals and was subsequently placed under interim judicial management (IJM) a process whereby an external entity supervises the distressed company's property & assets.
The troubles of the lender can be traced back to last year's collapse of Terra Ecosystem, which Hodlnaut directors had attempted to downplay their involvement. In reality, they had converted a substantial volume of crypto into TerraUSD (UST), resulting in losses amounting to around $190 million; this was highlighted by the Judicial Managers.
The collapse of Terra drastically impacted the crypto ecosystem, leading to a cascade of failed businesses-- ranging from Three Arrows Capital's renowned hedge fund, Celsius Network and Voyager Digital's lending platforms.
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