The request made by the bankrupt cryptocurrency lender Celsius Network to extend the date until which it must deliver its Chapter 11 plan was met with resistance due to the amount of cash that has been burned and the amount of time that has already been wasted.
The debtors request that the deadline for solely filing a plan be moved forward to the end of March from February 15 in their request to have it extended. In addition, they want to be the only ones who may approach other people with a plan until June is through.
Celcius’ request meets tough opposition
On the other hand, the United States Trustee, the formal committee of unsecured creditors, and an ad hoc group of borrowers all submitted objections on Wednesday, expressing a lack of trust in the capacity of the debtors to come up with a reorganization plan.
Celcius’ troubles
A steep fall in cryptocurrency values in July forced Celsius to lose hazardous bets, which led to the company’s decision to declare bankruptcy that month. The company is one of many lenders of digital assets that went bankrupt after the market meltdown that occurred in the previous year.
In a report released at the end of last month, an independent examiner who the court had appointed criticized Celsius and its former Chief Executive Officer, Alex Mashinsky, for inadequate risk management and misleading customers about the company’s business practices and financial health.
In a document made on Wednesday, the official committee of unsecured creditors said that Celsius might run out of funds as early as June because it is incurring operating expenses and mounting professional fees as part of the bankruptcy process.
The committee said in the petition that the debtors are “projected to encounter a liquidity wall in the next few months,” which would hamper their capacity to run these cases and finalize a Chapter 11 plan without selling further Bitcoin holdings.
