Finablr revealed two months ago that the company’s overall debt was about $1.3 billion, significantly higher than the $334 million initially reported last March.
Skadden, Arps, Slate, Meagher & Flom were appointed lead counsel of the investigation into Finablr’s “historic potential malfeasance . . . and any misappropriation of assets,” according to an article by The Financial Times, and will also “facilitate the pursuit of potential claims which are the subject of the investigation.”
Finablr said that it will appoint forensic experts as well, who will run a full review of the company’s payments and transactions, which a third-party funder will finance. The company also plans to take legal action against some of its owners and former employees in the hopes of recovering hundreds of millions of dollars, reported the FT.
Earlier this year, it was reported that Finablr was on the verge of collapse after first reporting $100 million in undisclosed funding, which could have been used as a security for financing arrangements for the benefit of third parties.
The Financial Conduct Authority froze the company’s trading at the time, and its stocks have remained on hold.
Finablr has also faced major challenges with its subsidiary, Travelex, which was hit with a massive hacking scandal in the beginning of 2020 that forced the company to go offline, disrupting customers over the holidays, and close for a month while checking that its computers were secure. The hackers demanded $6 million in exchange for returning encrypted customer data, which they stole over a 6-month period.
Finablr is now looking to offload the foreign exchange giant in a debit-for-equity swap in an attempt to refinance itself, after none of the offers to buy suited its lenders and banks.