Feb 8, 2023
Cash Burn at Bankrupt Celsius Sparks Ire Over Plea for More Time
(Bloomberg) -- Bankrupt cryptocurrency lender Celsius Network’s request to extend the deadline to present its Chapter 11 plan has run into opposition because of cash burn and the length of time already taken.
The debtors are seeking to extend the period during which they can exclusively file a plan to the end of March from Feb. 15. They also want to be the only ones who can solicit a plan until the end of June.
But the US Trustee, the official committee of unsecured creditors and an ad hoc group of borrowers filed objections on Wednesday, expressing little confidence in the debtors’ ability to come up with a restructuring proposal.
Celsius filed for bankruptcy in July after a sharp decline in crypto prices caused risky bets to backfire. The firm is one of a number of digital-asset lenders that hit the buffers in last year’s market rout.
A court-appointed examiner late last month blasted Celsius and its former Chief Executive Officer Alex Mashinsky for lacking adequate risk management and misleading customers about its business practices and financial health.
The official committee of unsecured creditors said in Wednesday’s filing that Celsius could run out cash by June given its running costs and accruing professional fees as part of the bankruptcy process.
The debtors are “projected to hit a liquidity wall in the next few months which would impair their ability to administer these cases and confirm a Chapter 11 plan without liquidating more cryptocurrency assets,” the committee said in the filing.
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