Crypto lender Celsius has extended the deadline for its disclosure statement by two weeks due to ongoing discussions with bidders, according to a court document dated April 12. This development was shared by David Adler, a crypto lawyer with a bankruptcy law firm, who posted snippets of the new court filing on social media. The Celsius debtors had previously informed users on April 7 that they would submit a disclosure declaration on April 12. The statement was intended to provide claim holders with adequate information so they could vote on the NovaWulf-sponsored restructuring plan.
The disclosure statement will include details about the circumstances that led to Celsius’ bankruptcy and the expected recovery for certain stakeholders if the restructuring plan is accepted. It will also contain answers to frequently asked questions. The bankruptcy court will hold a hearing to approve the disclosure statement, followed by a vote on the plan in May. The restructuring plan includes new terms that Celsius has negotiated with retail borrowers and creditors.
According to a report earlier this month, retail users who withdrew less than $100k and agreed to the plan will not face a clawback. Retail users who took between $100k and $250k can settle 27.5% of their funds in USD, Ethereum, or Bitcoin. However, the litigation trust will pursue those who withdrew more than $250k on a case-by-case basis.
Celsius, a crypto lending platform, filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the Southern District of New York on March 12. The company claimed that it had $50-100 million in assets and liabilities in the same range. Celsius CEO Alex Mashinsky stated that the company was filing for bankruptcy to protect its users and investors from any potential lawsuits.
Celsius’ bankruptcy filing was triggered by a lawsuit filed by a former user who claimed that the company had violated securities laws by offering unregistered securities. The user’s lawsuit was joined by several others who made similar claims. Celsius has denied the allegations and said that it would vigorously defend itself in court.
The company has continued to operate despite the bankruptcy filing, and its users have been able to withdraw their funds. Celsius has also continued to pay interest to its users who hold Celsius tokens. The company has said that it plans to emerge from bankruptcy as a stronger and more resilient company.
In conclusion, the extension of the deadline for Celsius’ disclosure statement is an important development for the company and its users. The statement will provide important information about the company’s financial situation and the restructuring plan that it has negotiated with its creditors. The vote on the plan in May will determine whether Celsius can emerge from bankruptcy as a viable company.