Former Cred CCO asks court to dismiss Cred Capital’s bankruptcy case

By Sarah Lizee

Olympia, Wash., Dec. 8 – Former Cred Inc. chief capital officer James Alexander is asking the U.S. Bankruptcy Court for the District of Delaware to dismiss Cred Capital, Inc.’s Chapter 11 case, according to a motion filed Tuesday.

Alexander, a defendant in an adversary proceeding brought by the Cred debtors alleging misconduct, claims he is the sole rightful director of Cred Capital and that the case was filed without valid corporate authorization.

“Daniel Schatt and Joseph Podulka claim they are the directors of Cred Capital. But, as explained in this motion, they are not,” he said.

Alexander claims that Schatt blames debtors’ precarious position on Alexander, including the assertion that the $10 million fraud perpetrated by a third-party was his fault, even though the transaction was approved by both Schatt and the appropriate committee at Cred.

Alexander also claims that Schatt apparently desired to improve the debtors’ liquidity and consolidated balance sheet, and an easy way to do that would bring the 300 Bitcoin held by Cred Capital, with a value of about $3 million, under the umbrella of the debtors.

“This was a change of strategy for Schatt because the initial plan for Cred Capital was for Cred Capital to be independent of the other debtors so it would not be brought down by the impending financial collapse,” he said.

Alexander alleges that he is the sole rightful director and held the voting proxy for the sole voting shareholder and, as such, only he could authorize the bankruptcy filing by Cred Capital.

“That did not happen, and the filing made by Schatt was ineffective,” he said.

As previously reported, when the debtors filed bankruptcy, Schatt said “a material loss connected with the onboarding of a fraudulent asset manager by former chief capital officer, James Alexander, and his misappropriation of certain debtors’ digital assets severely impaired the debtors balance sheet and limited the ability to hedge their investments against fluctuations in the price of cryptocurrency.

“Additionally, significant time, attention and legal costs had to be devoted to litigating against Mr. Alexander,” added Schatt, who noted that the litigation remains pending.

Cred is a San Mateo, Calif.-based financial services platform specializing in crypto and fiat currencies. The company filed bankruptcy on Nov. 7 under Chapter 11 case number 20-12836.

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