Celsius extends deadline for claims as lawyers seek hefty fees
The troubled crypto lender Celsius Network plans to file a motion that would give its customers one more month to submit their claims.
In a Twitter post, Celsius announced that it intends to file a petition to enable users to file claims against the failed lender to get back their money and assets held by the company at the time of its collapse.
This motion is scheduled to be heard by the Court at our hearing on January 10, 2023. For now, the deadline is extended until the motion is heard by the Court. We will provide further updates on the bar date as they become available.
— Celsius (@CelsiusNetwork) December 29, 2022
Liquidators now extend the original January 3 deadline to early February, arguing the move would allow those who have not sought compensation to join the bankruptcy proceedings. The initial deadline will be postponed until at least the bankruptcy court’s hearing on the motion on January 10, the Twitter thread explains.
As of December 29, creditors of Celsius who feel they are entitled to payment have filed more than 17,000 claims.
The news comes at a time when Celsius’ creditors community grows antsy as they observe how legal costs have continued to mount since the company originally filed for bankruptcy in July. According to a Financial Times report, the fees charged by bankers, lawyers and other advisers in the bankruptcy case are depleting the lender’s inheritance and had surpassed $53 million as of December 27.
In one instance, Kirkland & Ellis from, one of the law firms representing Celsius, asked for a charge of more than $9 million for services rendered in two months, according to a statement dated December 15.
Earlier in June, Celsius abruptly announced that it was pausing all withdrawals, swaps and transfers between users’ accounts because of extreme market volatility. The crypto lending and borrowing platform first looked for possible financing options from investors but ultimately went bankrupt.
Goldman Sachs was reportedly looking to secure $2 billion in funding to buy up distressed assets from Celsius. But as the events unfolded, the company has only set aside $44 million for client refunds, a tiny portion of the $4.72 billion in customer deposits held by its custody program.
Celsius has hired restructuring attorneys to advise on possible solutions for its mounting financial problems. Citigroup has also been enlisted by the firm to advise on possible solution.
In October, Fintech and cryptocurrency infrastructure provider Prime Trust agreed to turn over roughly $17 million worth of cryptocurrency to Celsius.