The financial platform Cred has filed bankruptcy. Cred informed customers that a process under Chapter 11 of the US Bankruptcy Code has been initiated. A business can file bankruptcy under Chapter 11 when it is not able to pay debts or its creditors. At least Uphold wallet users who used the CredEarn program know what is going on now. Two weeks ago Uphold discontinued cooperation with Cred. The lending platform informed its customers about "irregularities in handling of corporate funds". Cred began investigations due to the loss of corporate funds. Customers were and are still worried what will happen with their money. Cred didn't offer any more information. Yesterday Cred wrote to its customers:
Thank you for your outsized patience over the past two weeks. During this time, our burning desire to communicate with you conflicted with our legal obligation to remain silent until we could arrive at a clear understanding of next steps. We know this period has been concerning and stressful for you, and it has been difficult for all of us at Cred that we could not communicate more. We have been working around the clock in discussion with many parties, including insurance providers, investors, restructuring specialists, and legal counsel to understand how Cred has been impacted from recent events and what it means for you. We have come to the conclusion that it is in the best interest of our customers and all stakeholders for Cred to file for Chapter 11 of the US Bankruptcy Code.
Why Chapter 11 Bankruptcy? We can operate this process according to three principles that you deserve:
Transparency. You will have full and continuous access to every disclosure about Cred, its history, and the recent events leading to our decision to file for Chapter 11 bankruptcy. Everyone will have the same information, and you can access all information here, by phone (1-877-739-9988), or by email ([email protected]). The self-serve portal will provide you with a frequently asked questions section, and give you a deeper understanding of the process. It will be updated with new information regularly and you can sign up to receive email alerts.
Fairness. In a bankruptcy proceeding, every customer will have the opportunity to participate in the process. There are no special deals that would favor one customer over another, and you will have an opportunity to review all documentation.
Efficiency. Chapter 11 has a well-established set of processes, and we expect to come to a resolution within a few months.
As we work through a comprehensive plan to recover assets, we will be evaluating several options, including sale of the company or company assets, restructuring, and liquidation of assets. To that end, we have added Grant Lyon to Cred’s Board of Directors to oversee the restructuring process. Grant has more than 30 years of experience in corporate restructuring, and I have great confidence in his fair and objective analysis of company operations, development of strategic plans, and liquidity alternatives that serve the best interests of Cred stakeholders. Cred has also engaged Paul Hastings LLP as its legal advisor during the Chapter 11 process , and MACCO Restructuring Group as financial advisor to evaluate M&A and other restructuring opportunities.
Cred deeply apologizes to the community and to those "willingly to take a risk on us" for the anxiety, stress and concern Cred has caused. Dan Schatt, Co-Founder and CEO of Cred, said: "We are committed to do whatever we can to arrive at the most favorable outcome we can for all of our customers."
