Celsius Network LLC, a bankrupt crypto lender, has revealed that its record keeping was insufficient to accurately reconstruct intercompany claims. In a statement filed on Thursday, the company admitted that there were an estimated 7,000 unrecorded transactions between its two entities in the three months leading up to the bankruptcy filing.
The statement also said that due to the lack of record keeping, it may not be possible to fully reconstruct the intercompany claim. If it were possible, it would require a time and cost intensive forensic accounting exercise that would likely require the engagement of a forensic accounting firm.
After months of analysis, the best estimate for the full claim held by the LLC against CNL is $3.5 billion. This is significantly lower than the $9.1 billion intercompany claim held by Celsius Network LLC against Celsius Network Limited (CNL) based on books and records.
The statement was filed in response to a Feb. 9 court order from a New York bankruptcy court. Earlier this week, Celsius presented to the court its sale plan to fuel the company’s reorganization following its Chapter 11 bankruptcy filing in July last year.
The filing of the statement is a reminder of the importance of accurate record keeping for businesses. Without accurate records, it can be difficult to reconstruct claims and transactions, leading to costly delays and potential losses.