The emergence of cryptocurrencies continues to transform the market through digital distributed ledger transactions. However, the current crypto market crash forced several cryptocurrency trading platforms to file for Chapter 11 bankruptcy. Thus, leaving uncertainties and a myriad of issues and challenges to the already highly volatile crypto market.
The recent months have seen an uptick in bankruptcy filings as a continued result of the economic distress brought by the COVID-19 pandemic. With the increasing concerns for inflation, rising interest rates, labor shortages, and market volatility, access to bankruptcy protection is indispensable, especially for financially distressed companies. While taking refuge from the debt crisis doesn't come without a cost, reorganization under Chapter 11 of the Bankruptcy Code offers a viable way for many businesses to have a fresh start and get back on track. However, businesses must still be wary of the potential drawbacks amid the shifting regulatory climate of bankruptcy law.
With the ongoing economic turmoil and financial strain brought by the COVID-19 outbreak, valuation issues in Chapter 11 bankruptcy cases are expected to become more complex and challenging for companies. Because valuation plays an integral aspect in determining a Chapter 11 bankruptcy case, companies seeking reorganization during these economically challenging times must be aware of the potential issues that may arise before or during the process. Additionally, they must be in the know of the ever-changing legal revamps of a Chapter 11 bankruptcy valuation process to successfully address any potential or ongoing petition.
Preference claims in bankruptcy litigation have long been a subject of concern among creditors. As significant cases continue to refine and expand this legal landscape, litigators must always expect the emergence of new complexities that may reshape how they defend their clients.
The pandemic-related lockdowns have posed great difficulties and challenges to businesses across industries and have incited a significant drop in demand for products and services. While some were able to cope with the situation through government assistance programs, others have sought bankruptcy protection to save their assets or restructure their balance sheets.
The Intersection of Bankruptcy and Cryptocurrency: What Companies Must Know and Do to Mitigate RisksAhmed Zidan2021-08-30T01:19:48-04:00
Cryptocurrency is currently gaining popularity around the world as it builds better investment opportunities for several business sectors including the financial and banking industry. However, along with its soaring prominence, issues such as insolvency, crypto-backed finance, valuation claim risks, and digital asset restructuring challenges also emerge.