Cred: Court grants committee’s request to hold former CCO in contempt

By Sarah Lizee

Olympia, Wash., June 23 – Cred Inc.’s former chief capital officer, James Alexander, was held in contempt of the U.S. Bankruptcy Court for the District of Delaware, according to an order filed Tuesday.

As previously reported, the official committee of unsecured creditors had requested that the court hold Alexander in contempt, based on his violation of the court’s order granting a temporary restraining order and preliminary injunction against the former CCO.

The court also ordered that Alexander is barred from ever challenging claims that disputed transactions tied to him were for an improper purpose.

Alexander was also ordered to turn over documents relating to the disputed transactions by June 24.

As previously reported, the committee had said that the emergency order was unambiguous, in that it requires Alexander to turn over the debtors’ assets, produce discovery, submit a declaration and sit for a deposition, all by certain deadlines.

However, the committee said Alexander has disregarded the order, employing “evasive and obstructive tactics” to frustrate the debtors and the committee’s efforts to recover property of the debtors’ estates and obtain discovery.

The committee said Alexander gave “ridiculous excuses” about why he couldn’t turn over estate assets, and engaged in “obstructive and evasive” behavior at his deposition, including seeking a five-minute break during which he filed for personal bankruptcy and then refused to continue with the deposition.

The committee said Alexander’s bankruptcy filing forced the debtors and the committee to seek stay relief in the U.S. Bankruptcy Court for the Central District of California to enforce the emergency order.

While the California court granted the requested relief, to date there are identifiable assets that Alexander has not turned over or accounted for, the committee said.

Additionally, Alexander has hindered the committee’s ability to identify and locate additional assets that may be property of the debtors’ estates, the committee said.

“Without this information, the committee is unable to investigate the whereabouts of the unaccounted for assets,” the motion said.

Cred is a San Mateo, Calif.-based financial services platform specializing in crypto and fiat currencies. The company filed bankruptcy on Nov. 7, 2020 under Chapter 11 case number 20-12836.

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