Hodlnaut founders propose selling the firm instead of liquidation

cointelegraph.com:

The founders of the troubled cryptocurrency lender Hodlnaut are trying to save the business despite creditors insisting on its liquidation.

On Feb. 28, Hodlnaut’s interim judicial managers released the sixth affidavit of Hodlnaut co-founder Simon Lee reportedly stating the company’s founders proposed selling the business as a better option for creditors than liquidating the firm.

According to a report by Bloomberg, Lee said that he and Hodlnaut’s other co-founder Zhu Juntao have reached out to a number of “potential white knight investors.”

Lee reportedly wrote that Hodlnaut co-founders are confident the company’s user base “can be acquired and on-boarded on digital-asset platforms owned or affiliated to such investors.” He declared that such a business transaction would “maximize” value for creditors.

The affidavit further reaffirms Hodlnaut’s willingness to to sell the firm as the company was working with several potential investors to sell its business and other assets. A number of potential buyers reportedly inquired about purchasing Hodlnaut and its claims against the collapsed crypto exchange FTX as of early February.

The news comes shortly after key Hodlnaut creditors, including Algorand Foundation, in January rejected a restructuring plan offer allowing the current directors to oversee the firm’s operations during the restructuring phase. The creditors argued that the restructuring would do no help and it was in their best interest to liquidate the firm’s remaining assets.

Related: DCG losses top $1B on the back of 3AC collapse in 2022

As of December 2022, Hodlnaut Group owed a total of $160.3 million — or 62% of outstanding debt — to companies and entities like Algorand, Samtrade Custodian, S.A.M. Fintech and