- Unsecured Creditors of Celsius have opposed the crypto lender’s proposal to extend its restructuring period.
- The U.S Trustee and an ad hoc group of borrowers are also objecting to the bankrupt crypto lender’s proposal.
- The objections are based on concerns over cash burn and overall liquidity.
The Celsius Network is facing objections over its recent proposal to extend its restructuring period. The Unsecured Creditors Committee, along with the U.S. Trustee and an ad hoc group of borrowers, have expressed their lack of confidence in the bankrupt crypto lender’s plan in separate court filings made recently.
Celsius had pitched a plan to reinvent itself last month. The plan involved exiting the bankruptcy process by turning it into a publicly traded recovery corporation. It also entailed a new token called the ‘Asset Share Token’ (AST) to be issued to certain creditors. However, the crypto lender’s lawyers stated that the plan would require an extension of several months.
According to the court filing made by Celsius’ unsecured creditors took issue with this proposal. The committee argued that the estate has been burning cash ever since it filed for bankruptcy in July last year. The millions paid to the bankruptcy lawyers in addition to other expenses have led to projections of liquidity issues in the near future.
The proposal was subject to approval by the U.S. Trustee appointed by the bankruptcy court. The filing made by the U.S. Trustee’s Office revealed that they have little faith in Celsius’ ability to execute the ambitious proposal. “There is no basis given to extend this case another five months just for the filing and soliciting of a plan,” said William Harrington, the U.S. Trustee.
A group of ad hoc borrowers became the third entity to express objection to the bankrupt crypto lender’s restructuring period extension. Their court filing deemed the proposal “inappropriate” given the uncertainty of the outcome and the high cost involved. As such, the group has asked the court to deny Celsius’ proposal.