In a major development within the Celsius Network LLC bankruptcy saga, the company has extended a settlement opportunity to its large account holders.
As outlined in the notice under the Chapter 11 bankruptcy proceedings, account holders facing “Withdrawal Preference Exposure” have been called upon to settle their financial obligations by January 31, 2024.
Celsius Network Bankruptcy Saga
Withdrawal Preference Exposure, as the term suggests, pertains to the potential liabilities of account holders who made significant transfers within the 90 days leading up to the Petition Date, July 13, 2022. This requirement is a crucial component of the Modified Joint Chapter 11 Plan of Reorganization.
The filing tightly defines eligibility for this settlement plan. Account holders with exposure exceeding $100,000 are eligible. There are stipulations, however. They cannot be ‘Excluded Parties,’ have not voted against the Plan, and have not opted out of the releases. The notification of this settlement opportunity comes as an email containing a detailed notice and an election form to initiate the settlement process.
For account holders desiring to settle, the path is clear but time-bound. They must submit their election form by January 25, 2024, and make their settlement payment by January 31, 2024.
The notice also clarifies that Celsius account holders with an exposure of $100,000 or less do not need to take any action. However, those who do not settle their exposure might face legal consequences from the Litigation Administrator following the Effective Date.
Settlement payments will directly impact the distribution of funds to creditors. This increases the total amount distributed.
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Time for Celsius Customers to Act
Last month, the United States Bankruptcy Court for the Southern District of New York detailed the process for Celsius customers to retrieve their cryptocurrency assets.
According to the filing, customers must update their Celsius account with necessary information to comply with Anti-Money Laundering regulations. Notably, customers will bear the withdrawal fees on a per-transaction basis.
Overall, these moves mark critical steps in addressing the financial complexities faced by the company and its stakeholders.
The focus now shifts to the account holders’ response and the subsequent impact on the company’s restructuring efforts.
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