Celsius Lack of Record Keeping Results in Difficulty Reproducing Inter-Company Debt Structure

02/17/2023 12:10 • Tech Trends • 85 views

It is reported that according to the court documents cited by CoinDesk, Celsius did not fully record about 7000 transactions between it and its affiliated companies within three months before filing for bankruptcy, resulting in almost impossible to completely reproduce the inter-company debt structure.

Celsius did not record about 7000 transactions between subsidiaries and could not completely reconstruct the inter-company claims

Analysis based on this information:

According to court documents cited by CoinDesk, Celsius did not fully record approximately 7,000 transactions between itself and its affiliated companies within three months before filing for bankruptcy. This has made it almost impossible to completely reproduce the inter-company debt structure. The failure to maintain accurate records of the transactions could prove detrimental to Celsius and its affiliated companies.

The missout on important transactions for three months could tarnish Celsius’s reputation as it works to rebuild its business after the bankruptcy. The lack of record keeping means that it is impossible to determine which transactions resulted in products or services that were late or never delivered. Additionally, this omission also has the potential to lead to disputes among the affiliated companies in terms of accounting and reimbursement of debts.

Celsius’s failure to keep record leaves the court in a dilemma since it is impossible to trace the inter-company debt structure. This is a significant disadvantage because it limits the options available to reconcile the outstanding debts without the proper documentation. The court may thus require additional documentation in order to get a clear picture of the debt structure to make sound decisions.

The consequences of poor record keeping are costly, even to large companies such as Celsius. Without proper documentation, it can be challenging to demonstrate compliance with accounting standards, resulting in legal fines and a poor reputation. Therefore, the company and its affiliates should take record keeping seriously to avoid the risk of poor financial performance.

In conclusion, the failure of Celsius to fully record about 7,000 transactions between it and its affiliated companies within three months before filing for bankruptcy is a grave issue. The lack of documentation makes the inter-company debt structure difficult to reproduce, leaving the court in a tough situation. The company and its affiliates must take record keeping seriously to help identify any outstanding issues early and avoid costly mistakes.

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