Celsius New Bankruptcy Plan Was Deprecated By Debtors
Key Points:
- Celsius has filed a revised bankruptcy plan to reflect the successful bid for assets by the Fahrenheit consortium.
- However, the plan is currently facing opposition from representatives of creditors.
- In May, the firm announced that Fahrenheit’s plan had been selected as the winning bid to operate a new company owned by its creditors.
Celsius, the defunct crypto lender, has filed an amended bankruptcy plan to reflect the Fahrenheit consortium’s successful bid for assets.
The new bankruptcy plan, which was submitted early Thursday, must be approved by the New York bankruptcy court supervising the wind-up, and it is already facing creditor opposition.
According to David Adler of McCarter & English, the group of debtors he represents in the dispute will reject the proposal since Celsius would not release their collateral.
“Under the Plan, the Debtors have elected to treat the Retail Borrow Claims through the Set Off Treatment. See pics below. Although the Debtors are demanding repayment of the loans (ie demanding performance by the Borrowers), the Debtors have no intention whatsoever of performing their contractual obligations (ie returning the collateral to the borrowers). This proposed “treatment” violates every consumer lending law out there (state, federal) and the ad hoc Borrower group will be opposing this plan.
Debtors need to extend exclusivity so they filed the plan shortly after filing the motion. I don’t believe further extensions of exclusivity are warranted given that there has been NO communication from the Debtors to the Borrower Group in the last 6 or 7 weeks (we have been living in total radio silence). To demonstrate “cause” to justify an extension of exclusivity , debtors need to show that they are moving the case forward and communicating with constituencies. Conveniently ignoring a significant class of creditors and treating them like mushrooms for the past 7 weeks is the opposite of cause,” Adler said in a threat tweet.
Celsius launched an auction on April 22 in the hopes of finding a buyer who might help its crypto lending and bitcoin mining companies avoid bankruptcy.
Fahrenheit, a coalition of purchasers led by venture capital firm Arrington Capital and miner US Bitcoin Corp, was declared as the winning bidder in May, defeating NovaWulf’s offer for the company’s assets, which were originally valued at roughly $2 billion.
The new company will get between $450 and $500 million in liquid bitcoin as part of the Fahrenheit agreement, and US Bitcoin Corp will build a variety of crypto mining facilities, including a new 100-megawatt facility.
Based in New Jersey, Celsius also stated that it had a backup proposal from the Blockchain Recovery Investment Consortium (BRIC), a holding company associated with the Winklevoss twins’ Gemini Trust.
Celsius filed for Chapter 11 bankruptcy protection in July, becoming one of the numerous crypto lenders to fail as a result of the industry’s fast expansion during the Terra crisis.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
Author
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Celsius New Bankruptcy Plan Was Deprecated By Debtors
Key Points:
- Celsius has filed a revised bankruptcy plan to reflect the successful bid for assets by the Fahrenheit consortium.
- However, the plan is currently facing opposition from representatives of creditors.
- In May, the firm announced that Fahrenheit’s plan had been selected as the winning bid to operate a new company owned by its creditors.
Celsius, the defunct crypto lender, has filed an amended bankruptcy plan to reflect the Fahrenheit consortium’s successful bid for assets.
The new bankruptcy plan, which was submitted early Thursday, must be approved by the New York bankruptcy court supervising the wind-up, and it is already facing creditor opposition.
According to David Adler of McCarter & English, the group of debtors he represents in the dispute will reject the proposal since Celsius would not release their collateral.
“Under the Plan, the Debtors have elected to treat the Retail Borrow Claims through the Set Off Treatment. See pics below. Although the Debtors are demanding repayment of the loans (ie demanding performance by the Borrowers), the Debtors have no intention whatsoever of performing their contractual obligations (ie returning the collateral to the borrowers). This proposed “treatment” violates every consumer lending law out there (state, federal) and the ad hoc Borrower group will be opposing this plan.
Debtors need to extend exclusivity so they filed the plan shortly after filing the motion. I don’t believe further extensions of exclusivity are warranted given that there has been NO communication from the Debtors to the Borrower Group in the last 6 or 7 weeks (we have been living in total radio silence). To demonstrate “cause” to justify an extension of exclusivity , debtors need to show that they are moving the case forward and communicating with constituencies. Conveniently ignoring a significant class of creditors and treating them like mushrooms for the past 7 weeks is the opposite of cause,” Adler said in a threat tweet.
Celsius launched an auction on April 22 in the hopes of finding a buyer who might help its crypto lending and bitcoin mining companies avoid bankruptcy.
Fahrenheit, a coalition of purchasers led by venture capital firm Arrington Capital and miner US Bitcoin Corp, was declared as the winning bidder in May, defeating NovaWulf’s offer for the company’s assets, which were originally valued at roughly $2 billion.
The new company will get between $450 and $500 million in liquid bitcoin as part of the Fahrenheit agreement, and US Bitcoin Corp will build a variety of crypto mining facilities, including a new 100-megawatt facility.
Based in New Jersey, Celsius also stated that it had a backup proposal from the Blockchain Recovery Investment Consortium (BRIC), a holding company associated with the Winklevoss twins’ Gemini Trust.
Celsius filed for Chapter 11 bankruptcy protection in July, becoming one of the numerous crypto lenders to fail as a result of the industry’s fast expansion during the Terra crisis.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu
Harold
Coincu News
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