Crypto lender Celsius Network announced on Twitter that it has gotten approval from the court to extend its exclusivity period to submit a Chapter 11 plan of reorganization until February 15, 2023.
This afternoon, the Court approved an extension to our Exclusivity Periods until 2/15/2023. This is the period within which Celsius has the exclusive right to submit a chapter 11 plan of reorganization. We thank the UCC and ad hoc groups for their collaboration on this matter.
— Celsius (@CelsiusNetwork) December 6, 2022
Celsius added that the firm plans to use the extension period judiciously by building a strategy for a private business as well as investigating all profitable opportunities open to the firm for the benefit of its customers and other stakeholders.
The company also stated that its recovery method includes requesting a motion from the court to allow the sale of stablecoins in order to provide funding for its ongoing operations and maximize value for its investors and stakeholders. Celsius, on the other hand, stated that it intends to receive a ruling from the court by next week.
We are making substantial progress towards the determination of a value-maximizing path forward, but this important work is complex and it is critical for us to be as rigorous and thorough as possible in the interest of all stakeholders.
— Celsius (@CelsiusNetwork) November 10, 2022
Celsius had announced in November that it was filing for an extension of its reorganization plan stating that the firm was making significant progress toward determining a path forward that maximizes value for its investors and stakeholders.
Celsius Network in the Wake of Bankruptcy
In July, Celsius filed for bankruptcy protection in New York according to court filing due to liquidity issues after putting a hold on customers’ withdrawals.
According to the filings, Celsius Network had up to 100,000 listed creditors at the time it halted the withdrawals, and according to the assets declared, it had between $1 billion and $10 billion. The company reiterated that its liabilities are also within this range.
A report from Arkham Intelligence revealed that Celsius misused investors’ funds by investing in high-risk crypto trading activities. The report stated that Celsius entrusted corporate funds totaling approximately $530 million to an asset director who specialized in high-risk leveraged trading strategies.
In August, a New York bankruptcy judge gave Celsius approval to sell the products (Bitcoin) of its crypto mining. Celsius had mined a total of 432.30 Bitcoin (BTC) through its subsidiary Celsius Mining.
Judge Martin Glenn voiced worries about the mining activities’ lack of profitability before giving his approval, but he did so in the hopes that the firm’s decision would eventually benefit its clients.
Celsius’s bankruptcy proceedings may be coming to an end soon, as the court has approved its planned sales schedule. The court has set December 12 as the deadline for final bids and December 15 as the auction date if necessary.
