Celsius‘ motion to extend timeline for restructuring plan faces objection from creditors

“It is time to allow the Debtors’ customers to propose their own plan for the assets that they were defrauded into investing with Celsius,” said a Withhold account holders’ filing.

The unsecured committee of creditors and others involved in crypto lending firm Celsius’ bankruptcy case have objected to a motion from the debtors delaying a reorganization plan.

In separate Feb. 8 court filings, the committee and Withhold account holders as well as the United States Trustee and Celsius borrowers objected to a motion aimed at extending the exclusivity period for a Chapter 11 restructuring plan from Feb. 15 to March 31. Under the proposed extension, Celsius’ debtors would also have the option of soliciting a plan until June 30.

The unsecured committee of creditors said the bankruptcy case “must proceed towards a resolution” based on the impact on Celsius users waiting months without access to their funds. Objections from the U.S. Trustee and Celsius borrowers claimed the bankruptcy was “consuming enormous amounts of professional fees” without guarantees of a resolution.

“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,” said the committee’s filing.

We’ve been saying for months that preferred equity is out of the money by billions $$$ due to (among other claims) intercompany claims. Judge Glenn is now considering InterCo claims in the context of the customer claim litigation. https://t.co/9I1yFQaQzR

— Celsius Official Committee of Unsecured Creditors (@CelsiusUcc) February 9, 2023

Objections from Withhold account holders seemingly expressed similar frustration:

“Enough is enough. It is time to allow the Debtors’ customers to propose their own plan for the assets that they were defrauded into investing with Celsius. The Debtors’ exclusive right to control these cases must give way to the rights of the Debtors’ customers.”

Related: Judge denies motions from Celsius users seeking to reclaim assets

Celsius halted withdrawals for users in June 2022, with the firm filing for Chapter 11 bankruptcy in July. In December, Bankruptcy Judge Martin Glenn granted an extension for debtors to file a reorganization plan following a November motion, pushing the deadline to Feb. 15.

At the time, many affected Celsius users claimed the company was stalling proceedings with their funds in limbo, a sentiment echoed by the same group following the Feb. 8 objections:

Ladies and Gentlemen, brace yourselves, UCT and @CelsiusUcc made waves by voicing their objections to the #Celsius reorg exclusivity extension on the Docket. This is a historic moment for us creditors as we now wield the ability to impose our own reorg plan!

Thanks to UCC & UST

— CR (@C_Researchers) February 8, 2023

At the time of its bankruptcy filing, Celsius reported a balance gap of $1.2 billion, with net liabilities of $6.6 billion and $3.8 billion in assets under management. However, reports later suggested that the lending platform’s actual debt was closer to $3 billion.