Celsius creditors, US gov oppose bankrupt’s lender extension request due to high cash burn rate News ▸ US ▸ Celsius ▸ Bankruptcy
Celsius creditors, US gov oppose bankrupt’s lender extension request due to high cash burn rate
Celsius creditors said the case must proceed toward a resolution as it has been around eight months since the firm paused withdrawals.
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Updated: Feb. 9, 2023 at 12:32 pm UTC
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The U.S. government and creditors have objected to Celsius’ plan to extend its restructuring plan to June 30, according to Feb. 8 court filings.
Celsius wanted to extend its exclusive filing period until March 31 and its exclusive solicitation period through June 30, according to a Jan. 25 filing. The firm argued that it might have to liquidate assets if it could not “reach a definitive agreement” on its restructuring plan.
Celsius’ cash burn rate
Creditors are against the extension due to the bankrupt company’s high cash burn rate.
According to Celsius’ unsecured creditors, the firm could hit a “liquidity wall” within the next few months. The creditors said:
“Based on the Debtors’ cash burn rate and the rate at which professional fees are accruing in these cases, the Committee understands the Debtors’ expense rate and accrued liabilities indicate they could run out of cash by June 2023 unless they sell crypto assets to meet administrative claims and expenses.”
The U.S. Trustee corroborated this view. The Trustee argued that it was inappropriate to grant such extensions given the “rate at which professionals are consuming Debtors’ assets.”
Celsius creditors concluded that the cases must proceed toward a resolution as it has been around eight months since the firm paused withdrawals. They added that:
“During that time, many account holders’ lives and finances have been upended because of the past conduct of the Debtors and certain of their former directors and officers.”
The case will be heard on Feb. 15.
Meanwhile, Celsius recently published the names of its users eligible to withdraw their assets from its platform. An independent examiner report said the business operated like a Ponzi.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
