- Celsius has chosen the Set Off Treatment for handling Retail Borrow Claims tweeted Simon Dixon.
- Borrower Ad Hoc group plans to challenge exclusivity extension and Sponsors Plan says David Adler.
- Debtors’ lack of communication raises concerns about extending exclusivity in Celsius Bankruptcy.
On June 15, Bank To The Future CEO Simon Dixon announced that Celsius has decided to handle the Retail Borrow Claims using the Set Off Treatment. He tweeted that the Borrower Ad Hoc group intends to challenge the extension of exclusivity and the Sponsors Plan going forward.
He also shared images from the Joint Chapter 11 Plan of Reorganization of Celsius Network LLC and Its Debtor which highlighted that Class 2 includes all Retail Borrower Deposit Claims, will receive the Set Off Treatment. Holders of these claims can vote on accepting or rejecting the Plan, as Class 2 is considered impaired under the Plan.
The document further briefed that the “Set Off Treatment” refers to offsetting or deducting the amount owed by a borrower from their outstanding Retail Advance Obligations. The borrower retains the funds from their Retail Advance Obligation, and the remaining balance of the Retail Borrower Deposit Claim is adjusted accordingly. No additional payments are required from the borrower for the claim.
Dixon’s tweets were a reply to McCarter & English LLC’s Bankruptcy Partner, David Adler’s thread which reported that Celsius has recently filed their reorganization plan, which includes the incorporation of the Fahrenheit deal.
According to Adler, despite demanding repayment of the loans from the Borrowers, the Celcius Debtors do not intend to fulfill their contractual obligations by returning the collateral to the borrowers. Moreover, the proposed treatment is seen as violating consumer lending laws at both the state and federal levels. Additionally, the ad hoc Borrower group plans to oppose this plan in response.
Adler noted that the Debtors in the Celsius Bankruptcy case filed a plan and motion to extend exclusivity. However, there has been no communication from the Debtors to the Borrower Group for the past 6 or 7 weeks, which contradicts the need for an extension. He stressed that the Debtors are ignoring a significant class of creditors and failing to meet the requirements to demonstrate “cause” for extending exclusivity.
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