Celsius withdraws motion to hire CFO at $92,000 a month

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Celsius on Thursday was sued by former investment manager Jason Stone as pressure continues to mount on the company amid a crash in cryptocurrency prices. Stone alleged, among other things, that Celsius CEO Alex Mashinsky (above) was ‘capable of becoming very rich’.

Piaras Ó Midheach | Sportsfile for the Web Summit | Getty Images

Struggling lending platform Celsius pulled out his motion to bring back the former chief financial officer Rod Bolger at $92,000 per month, pro-rated over a period of at least six weeks, according to a court document filed Friday in the Southern District of New York. The notice of withdrawal came just ahead of a hearing scheduled for Monday to consider it.

While Bolger worked full-time with the company as chief financial officer, the original movement shows that he had a base salary of $750,000 and a performance-based cash bonus of up to 75% of his base, in addition to stock and token options, bringing the high end of his total earnings range to about 1 .3 million. The filing also said Bolger is technically still on the company’s payroll.

“On June 30, 2022, Mr. Bolger notified the debtors that he was voluntarily terminating his employment,” read the file. “Pursuant to his notice of termination and the terms of his employment agreement (as defined below), Mr. Bolger is required to give debtors eight weeks’ notice, which he has done, and he continues to serve as an employee of the debtors.”

If the motion had been approved, it is unclear whether Bolger would have potentially received compensation of $62,500 (his monthly base salary), in addition to the $92,000 monthly consulting fee Celsius had requested. The filing said he continued to serve as a Celsius employee, but it also said Bolger was “not entitled to severance packages.”

CNBC reached out to Celsius to ask about the terms of the proposed motion, but did not immediately respond to our request for comment, which was sent out of business hours.

The decision to deny the petition came three days after CNBC first reported the request to bring Bolger on as a consultant during the bankruptcy process. It also follows a formal objection presented by Keith Suckno, a CPA and Celsius investor who challenged Celsius’ decision, alleging “little detail” was given as to why Bolger’s services were needed in the bankruptcy proceedings.

In the original movement, Celsius said he needed Bolger to help navigate the bankruptcy process as an adviser, “due to Mr. Bolger’s familiarity with debtors’ businesses.” He went on to say that during Bolger’s tenure, he led efforts to stabilize the business during turbulent market volatility this year, guiding the financials of the business and acting as a business leader.

Bolger, a former Chief Financial Officer of Royal Bank of Canada and divisions of Bank of Americawas previously at Celsius for five months before resigning on June 30, about three weeks after the platform suspended all withdrawals.

Bolger’s Last Days at Celsius

In Suckno’s objection to bringing Bolger back to guide the bankruptcy proceedings, he claimed that Bolger had “misrepresented the financial position and liquidity” of Celsius in a company blog post titled “Meet Rod Bolger, CFO, Celsius,” released five days before the platform froze withdrawals due to “extreme market conditions”.

In that article, which CNBC also reviewed, Bolger said in a print interview that “Celsius’ “robust liquidity framework, established practices around liquidity data and modeling” were similar to other major financial institutions.

“It put us in a strong position to weather the recent market turmoil and ensure customers who needed access to their digital assets could get it for free and clearly,” continuation of quote from Bolger in Celsius blog post. The following Monday, the platform halted all withdrawals and transfers.

Meanwhile, two days after this blog post – and three days before Celsius froze customer funds on the platform – Bolger was featured on Celsius’ weekly Ask-me-anything YouTube showin which he said the company welcomes the regulations.

“We believe in transparency. Blockchain is about transparency. We’re transparent. You know, my goal is for us to be regulated everywhere,” Bolger said in the video.

“We have voluntarily disclosed a lot of financial information. My goal – even before we are regulated and/or made public and forced to do so – is to continue to develop the tools that are At Basel… These are essentially the standards by which banks work,” Bolger continued, adding that Celsius already assesses market risk and operational risk, so they can “continue to build the level of trust in the community.”

The video was posted on Friday, June 10, and the following Monday, June 13, Celsius shut down its user fund ramps. Celsius owes its users approximately $4.7 billion, according to his bankruptcy filing.

CNBC sent several requests to Bolger on two different platforms, but did not immediately respond for comment.

Following Bolger’s departure as CFO, Celsius then installed Chris Ferraro, then head of financial planning, analysis and investor relations for Celsius. A few days after his appointment, the company filed for bankruptcy protection.

Once a titan of the crypto lending world, Celsius is now facing claims that it was running a Ponzi scheme by paying first depositors with the money it got from new users.

At its peak in October 2021, CEO Alex Mashinsky said the the crypto lender had $25 billion in assets under management. Now Celsius has gone down to $167 million “cash on hand”, which it says will provide “sufficient liquidity” to support operations during the restructuring process.

This filing also shows that Celsius has more than 100,000 creditors, some of whom lent money to the platform without any collateral to back up the arrangement. Its list of top 50 unsecured creditors includes Sam Bankman-Fried’s trading company, Alameda Research.

Retail investors have filed demands with the judge to help them recover some of their lost assets, with some saying their savings have effectively been wiped out.

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