The insolvent cryptocurrency lender Celsius Network intends to present a petition that would give users one more month to lodge their claims.
Celsius legal costs keeps going up
The cryptocurrency community has begun to lose patience as they observe how Celsius’ legal costs have continued to mount and are depleting the lender’s inheritance. Celsius indicated in a tweet on December 29 that it would look to extend the existing claim deadline from January 3 to early February.
Celsius is preparing to file a motion later this week requesting an extension of the bar date, which is the deadline to file a claim, from January 3, 2023, until early February.
— Celsius (@CelsiusNetwork) December 29, 2022
According to Celsius, the January 3 deadline will be postponed until at least the bankruptcy court’s hearing on the motion on January 10. In a Twitter thread, Celsius Network explained what the whole process involved.
During the bankruptcy proceedings, creditors who feel they are entitled to payment may submit claims via the claims process. As of December 29th, creditors of Celsius have filed approximately 17,200 claims.
Celsius administrative cost
But since Celsius administrative costs have kept rising since it originally declared bankruptcy in July, creditors are impatient with the company. Financial Times reporting on December 27 stated that $53 million had already been spent on bankers, attorneys, and other advisers’ costs in the bankruptcy process.
Take for instance, a fee statement dated December 15 from one of the law firms representing Celsius, Kirkland & Ellis, asked for a charge of more than $9 million for services completed in September and October.
Comparatively, Celsius has only set aside $44 million thus far for client refunds. This money, which makes up a small portion of the $4.72 billion in customer deposits held by Celsius, belongs to users who have only ever kept money in the Custody Program.
Reactions from the Crypto Twitter Community
The most recent postponement in the proceedings has not been well received by some in the crypto world, who claim it is just another delay strategy. For instance, a user wrote: “Stop wasting time stop delaying, please get on with the proceedings and give me my money back!!!!”
So the lawyers get millions but I wonder what us small fry folks get?
— Chris (@browncoat1of1) December 29, 2022
In a tweet made on December 23 by the founder of the international investment platform BnkToTheFuture Simon Dixon, he noted that by the time users are able to get their money back from Celsius, they should only anticipate receiving about half of what they invested. Dixon has been a vocal participant in the Celsius bankruptcy proceedings.
Prepare yourself for 50% in 6 months with #Celsius Chapter 11 to manage your expectations | Focus on your family over XMas & rebuilding in 2023. https://t.co/E0WeDuPem0
— Simon Dixon (@SimonDixonTwitt) December 23, 2022
On October 20, Judge Martin Glenn designated fellow Judge Christopher Sontchi to serve as a “fee examiner” at the request of Celsius, the U.S. trustee, and the unsecured creditors’ committee. He is tasked with negotiating and approving the fees established by the attorneys and other experts involved in the case.
Additionally, money from Celsius’ estate is used to pay the fee examiner, whose most recent fee statement, submitted on December 21, asks for slightly under $20,000 for services rendered in the month of November.