- Celsius investors want the proceeds from the sale of the company’s remaining valuable assets.
- The Creditors Committee believes that it has the right to cash in the payment from sales.
- Investors have submitted a motion to appoint an official preferred equity committee.
- The presiding judge has agreed to the U.S Trustee’s proposal to appoint a fee examiner.
Some key developments have come out during the latest bankruptcy hearing of the Celsius Network, which was held earlier today.
Per court filings, attorneys appearing for investors of the defunct crypto lender, including Canada-based pension fund CDP Investissements Inc and venture capital Westcap Management, have asserted that the proceeds from the sale of “valuable assets” are for the investors to claim.
In response to this, the attorney for the Official Committee of Unsecured Creditors (UCC), Gregory Pesce, has argued that the Celsius’ account holders i.e the customers have the right to claim the proceeds from sales involving any of Celius’ legal entities. Pesce cited the company’s terms of use while making this argument.
The bankrupt lender’s mining business, its loan portfolio, and a wholly-owned subsidiary called GK8 are the assets at the center of this debate.
Celsius’ mining business was in the news last week over its failure to repay $5.4 million owed to crypto mining and hosting firm Core Scientific.
Committee for preferred equity holders of Celsius
Investors of Celsius believe that the existing creditors’ committee is largely made up of the lender’s customers whose funds came into play at a relatively later stage. The investors have alleged inadequate representation of the interests of stockholders.
To that end, Dennis Dunne, counsel for Series B preferred equity holders, has requested the presiding judge Martin Glenn to appoint an official committee dedicated to the preferred equity holders. A ruling on this matter will be made at a later date.
Appointment of a fee examiner
Addressing the court-appointed U.S Trustee’s proposal, Judge Glenn has agreed to appoint Christopher Sontchi, a retired bankruptcy judge, as a fee examiner for the fee review process and to monitor the professional fees involved in the proceedings.
“I view my role here to keep an eye on costs… In this case, there’s so many moving parts, rabbit holes.” said Sontchi.
The examiner will be assisted by Katherine Stadler of Godfrey & Kahn, S.C, for the fee review process.
