Individuals implicated in the Celsius bankruptcy case have opposed a proposal by the now-defunct cryptocurrency lender that would extend a major deadline for a second time.
Since I applied Chapter 11 bankruptcy last JulyThe company has the exclusive right to present the restructuring plan to the lender.
In December, the court overseeing Celsius’s Chapter 11 bankruptcy extended that schedule for Celsius to February 15, after the company said it needed additional time.
But an application filed in late January asked the court to extend that period again by 44 days to March 31, when Celsius could ask for a vote on the proposed plan until the end of June.
However, this request was met with concern by the entities involved in the case.
Percentage cash may run out
A new application by the Celsius Committee of Unsecured Creditors objected to this extension.
“Debtors face a looming liquidity cliff in June,” the report said. reading. “If debtors follow their current schedule, they simply cannot get out of bankruptcy at that point.”
The commission argued that Celsius could “run out of cash” by the end of June given the company’s “liquidity burn,” putting it in a position where the defunct lender would need to sell more assets to fund its bankruptcy case.
In addition, William Harrington — a US Department of Justice official tasked with overseeing administrative proceedings in the case —He said extension would be “inappropriate”.
Harrington said the company did not provide any reasons in its proposal to justify extending the application period until the end of June.
He also cited the rate at which lawyers are depreciating Celsius’ assets as a reason for ruling against the extended timetable, despite the cryptocurrency lender’s claim that many creditors would have to consider the proposed plan.
“Whatever debtors say about how many creditors in this case need to send the plan and disclosure statement, it indicates that no other case has been given such a long extension to file under an exclusivity request,” Harrington said. .
The bankruptcy court for the Southern District of New York had previously ruled that Celsius could Selling stablecoins for $18 million held in Earn accounts — which offered customers bonuses on deposits of digital assets — to help fund their administrative expenses.
A hearing for the motion will be held next Wednesday, February 15th.
The Unsecured Creditors Committee said that if no agreement is reached, it plans to ask the court to deny Celsius’ application and said it would be willing to submit its restructuring plan “quickly.”