- Terraforms said bankruptcy proceedings will help appeal the SEC’s lawsuit.
- Terraforms filed for bankruptcy last week and will have its first day of hearing today.
- The company can avoid costs by relying on protections offered under the Chapter 11 proceedings.
Ahead of the commencement of its Chapter 11 proceedings, troubled cryptocurrency firm Terraform Labs revealed that its decision to file for bankruptcy will help in its efforts to appeal the litigation that the US Securities and Exchange Commission (SEC) is pursuing against the company.
In the January 30 filing at a Delaware Bankruptcy Court, Terraform Labs CEO Chris Amani argued that the bankruptcy is integral to successfully appealing it’s lawsuit with the SEC. The CEO wrote:
“[The bankruptcy protection] is critical to the Debtor’s ability to operate as a going concern, preserve value for its creditors and stakeholders (including the Terra community), provide an orderly process for resolving competing claims against it, and pursue an appeal of the SEC Enforcement Action.”
Before Terraform Labs could file an appeal against the SEC, it would normally have to provide a “supersedeas bond” …
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