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Celsius shareholders want their own legal representation in bankruptcy case

Celsius shareholders want their own legal representation in bankruptcy case

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Celsius shareholders have requested an official legal representative to represent them in the bankruptcy proceedings, according to a court filing filed Sept. 22.

According to the filing, there is a clear need for this fiduciary representation because there are only two financial stakeholders — retail customers and shareholders.

According to shareholders, the Unsecured Creditors Committee (UCC) is focused on ensuring that private clients get maximum value without regard to shareholders. It means that no one adequately represents the interests of the shareholders, and any restructuring plan may affect their interests.

Proof of this is Celsius’ claim that “UCC is (its) partner, and in these cases it’s about the customer.”

Shareholders said:

“Urgently call for their trustees – with the same rights, status and resources as the UCC – to represent their interests.”

Those shareholders participated in a $750 million funding round months before Celsius filed for bankruptcy.

Shareholders want Celsius to “dollarize” their retail crypto holdings

Another noteworthy aspect of the initiative is that shareholders want Celsius to “dollarize” their customers’ crypto holdings.

According to the filing, Celsius’ intention to return customers’ crypto assets instead of fiat value violates bankruptcy law and “could negatively impact shareholder recovery.”

If this proposal is approved, any increase in the value of cryptocurrencies during the proceedings will likely go to shareholders.

The application is scheduled to be heard on October 6, the same day the court appearance and hearing of the lawsuit is expected to begin. However, the proposal can be opposed until next week.

Celsius IOU tokens

A recently leaked audio file suggests that Celsius may be planning to pay back its creditors using crypto-IOU tokens.

In the year leaked audio recording The company’s chief technology officer and co-founder, Nuke Goldstein, said at the meeting that the company plans to wrap each customer’s debt into an IOU token that “represents the relationship between how much we actually owe and how much we have.”

Second leaked phone call reveals that Celsius CEO Alex Mashinsky has shared the idea with UCC and received a positive reaction.

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