Vauld proposes to set up Committee of Creditors

moneycontrol.com:

Following its last hearing, cryptocurrency lending platform Vauld reached out to its customers seeking their interest to be a part of a proposed Committee of Creditors (CoC), to whom it owes money.

Over the last two months, Vauld had halted withdrawals, suspended operations citing financial troubles, announced a possible acquisition by London-based crypto lender Nexo and lately came under the scanner of the Enforcement Directorate (ED) over accusations of assisting in financial fraud.

Now, in an e-mail sent out on August 31 to its customers, the start-up responded to the concerns of creditors planning to seek legal representation and withdrawal of allowances during Vauld’s ongoing restructuring process.

“During the hearing, a few creditors raised queries on withdrawal allowances and proposals for the same. In an earlier email sent on 27 August 2022, we asked you to indicate your interest in being part of the CoC. We are finalising the details of the proposal for the CoC with our advisors. We would be happy to share with you more information and details on the same in due course,” the company said in the email accessed by Moneycontrol.

“It has come to our attention that some users are concerned about the query as to whether they intend to obtain legal representation during the restructuring process. We would like to clarify that we had asked this question because the Company contemplates that the CoC is for those creditors without legal representation. It is intended that the CoC will represent creditors who do not have any legal representation. If they have legal representation, these legally represented creditors would have their own legal counsel to represent them. The CoC is intended to provide an avenue for creditors