Our Team Can Assist You With:
- Submitting a Proof of Claim to preserve your legal rights for repayment.
- Conducting a Fact finding Feasibility Study to collect all information from you and review all the documents you have in connection with your investments and loans.
- Evaluate legal theories and procedural techniques that could potentially be used to protect and further your interests and claims, including but not limited to you being deemed a “secured creditor” and establishing a Creditors’ Committee.
- Monitoring the initial phase (about the first 1-2 months) while communicating with the Bankruptcy Court and other counsel and engaging in all necessary activities involved in your representation.
- Handle all other aspects of the proceeding and advocate in and out of the courtroom on your behalf, including but not limited to legal research and settlement.
Filing Proof of Claim
A proof of claim is a document that a creditor files with the bankruptcy court to assert their rights of repayment from the debtor.
Most importantly, a properly and timely filed proof of claim will supersede any scheduling of claims by the debtor in the Chapter 11 Bankruptcy reorganizations.
Generally, any creditor whose claim is scheduled as disputed must file a proof of claim in order to be treated as a creditor for purposes of voting on the plan and distribution under it.
Our firm can assist you with processing and filing a Proof of Claim to protect your rights.
- In the event that you, Celsius or any Third Party Custodian becomes subject to an insolvency proceeding, it is unclear how your Digital Assets would be treated and what rights you would have to such Digital Assets.
- Celsius does not make any representation as to the likely treatment of Digital Assets in your Celsius Account, including those in a Custody Wallet, in the event that you, Celsius or any Third Party Custodian becomes subject to an insolvency proceeding whether in the U.S. or in any other jurisdiction.
- You explicitly understand and acknowledge that the treatment of Digital Assets in the event of such an insolvency proceeding is unsettled, not guaranteed, and may result in a number of outcomes that are impossible to predict reliably, including but not limited to you being treated as an unsecured creditor and/or the total loss of any and all Digital Assets reflected in your Celsius Account, including those in a Custody Wallet.
However, it’s very clear from Chapter 11 Petition that Celsius automatically listed all customer’s accounts as “unsecured claims”. As such, evaluating legal theories and procedural techniques that could potentially be used to protect and further your interests and claims, including but not limited to you being deemed a “secured creditor”.
Celsius’ Restructuring Process
Celsius will have the burden of demonstrating that Plan satisfies the “best interest” test. See, e.g., In re GSC, Inc., 453 B.R. 132, 179 n.66 (Bankr. S.D.N.Y. 2011).
That test “focuses on individual creditors rather than classes of claims . . . [and] requires that each holder of a claim or interest either accept the plan or receive or retain property having a present value, as of the effective date of the plan, not less than the amount such holder would receive or retain if the debtor were liquidated under Chapter 7.” In re Drexel Burnham Lambert Grp., Inc., 138 B.R. 723, 761 (Bankr. S.D.N.Y. 1992).
It’s questionable whether Celsius will be able to satisfy the best interest test and why it automatically listed customers’ accounts as “unsecured claims” when Celsius User Agreement provided that “it is unclear how [customers’] Digital Assets would be treated” in case of insolvency.
Celsius Chapter 11 Reorganization plan could be impaired. Section 1124(1) provides that a claim is impaired unless the plan “leaves unaltered the legal, equitable, and contractual rights to which such claim or interest entitles the holder of such claim or interest.”
Section 1126(f) of the Bankruptcy Code, 11 U.S.C. § 1126(f), provides that classes that are not impaired by a chapter 11 plan are deemed to have accepted it.
Chapter 11 creditors have a fundamental right to have a meaningful voice in the plan-confirmation process, either by accepting the chapter 11 plan or bringing to the court’s attention any concern that it may have regarding any aspect of the bankruptcy case.
Celsius’ Restructuring Plan & Account Holder Claims
Can Celsius’ Customer Sell its Unsecured Claim?
Yes, absolutely. If you are holding Celsius’s unsecured claim, you may wish to consider the option of selling the claim to a third party at discount to secure some guaranteed recovery rather than wait until the conclusion of the case and the distribution, if any, to holders of such claims.
United States Bankruptcy Court
Southern District of New York
One Bowling Green
New York, NY 10004-1408