Celsius to receive $70 million as per latest filing; liquidation may still be on the cards
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Court incisions Kirklan & Ellis LLP, the law firm representing Celsius, revealed that the bankrupt crypto-lender is expecting a cash flow in the first week of October.
According to the filing, Celsius is set to receive nearly $70 million as their USD-denominated loans mature next month. The detail was discovered only recently, and until now the loans were believed to be dollar-pegged stablecoins.
Celsius plans to finance its operations until the end of this year by repaying the loan.
Good news for some
In the series tweetsCelsius informed its users that it had left a separate movement. This move was requesting permission to reopen withdrawals from “special custody and retention accounts”. A Twitter thread clarified that withdrawals are only available for accounts that do not have a loan.
Ironically, earning accounts advertised as safe are not eligible for withdrawals, according to Celsius’ application. In addition, Celsius plans to release approximately $50 million from the $210 million escrow accounts. The big difference is that only “clean” custodial accounts are eligible for withdrawal.
Users are screaming
Users criticized to the lender for limiting withdrawals to those who had a custodial and retention account. Customers with regular earning accounts did not welcome this move.
Some users argued that the accounts that generated the most Celsius income (non-retention) should have been considered for the proposed withdrawal opportunity. A hearing is scheduled for October 6 to hear proposals from custodial account holders.
Legal experts David Adler and Simon Dixon were present in the courtroom during Celsius’ hearing on 1 September. They noted that it is possible that the bankruptcy court may appoint an independent examiner to the pending case.
The appointment will be decided at the next session on September 14. In addition, it is possible that an independent investigator may enter into liquidation. This alignment rejects any focus on restructuring efforts.
Interestingly, Adler made some bold claims “Celsius ball summary‘ about prioritization of withdrawals. He also mentioned the separation of account types from the same.
Furthermore, Adler noted that Celsius’ lawyers were trying to pit these “ad-hoc groups” against each other. Such an infighting would draw attention away from CEO Alex Mashinsky and Celsius’ operations.
Much needed cash
The news of the newly discovered stash of cash comes at just the right time, as Celsius discovered it was running out of cash. The budget and coin report was filed on August 14, and it predicts that Celsius will run out of cash by October. In addition, it would not be able to finance its operations.
The cash-strapped crypto lender has made several offers for cash injections since filing for Chapter 11 bankruptcy.