Celsius creditors contemplate next steps following examiner report

Despite a damning report from a court-appointed examiner, lawyers representing former Celsius customers told clients they are still in talks with the company around a “recovery corporation” proposal put forward by Celsius’s lawyers in a last-ditch effort to partially repay them.

The Twitter space town hall for the Celsius Official Committee of Unsecured Creditors came despite findings describing extreme self-dealing and over-leveraging in the report released earlier Tuesday.

During a Twitter space “town hall,” which had about 2,500 listeners on Tuesday, representatives from the committee spoke about a recovery corporation concept — a proposal for the company to tokenize and distribute to account holders an “asset share token that would reflect the value of the assets managed by the Recovery Corporation.”

A UCC attorney said that the committee is also, “running down a number of other options in particular,” and expressed dismay that details of bids for Celsius leaked last week.

“This leak is likely only going to reduce creditor recoveries because whether the information is accurate or not, it provides people that are still in the process to whom we’re speaking every with day with information about how things might or might not be unfolding and that reduces the flexibility that the committee has in dealing with these parties to get the best possible outcome,” the representative said.

High-profile Celsius creditor Tiffany Fong acknowledged on her Twitter feed that she leaked information she obtained about bids placed for Celsius’s assets. Binance, Bank to the Future, NovaWulf, Cumberland/DRW and Galaxy Digital were among bidders.

Fong responded to a comment by a Celsius investor, Simon Dixon, on Twitter, saying she “directly asked someone high up at Celsius before leaking the bids asking if the bids were still on the table. I intentionally didn’t leak them as I did NOT want to disrupt the bidding procedures.”

Another of the options the UCC is exploring is selling off Celsius’s mining business, a committee representative said. The lawyer also said the committee has been looking at “winding down Celsius or transferring the crypto to a third party.”

A court-appointed examiner released an over 600-page report earlier on Tuesday that contained major revelations, from blowing past its own lending limits, including lending $2 billion to Tether, to owing millions in taxes. Celsius remains in the middle of the bankruptcy process after a sudden collapse last summer.

Listeners also asked about CEL, the lender’s native token, which was mentioned throughout the examiner’s report. The examiner found that Celsius spent at least $558 million buying CEL.

It is in the best interest for people to distance themselves from the CEL token, a listener using the Twitter name “Victim of Celsius” said during the audio town hall.

“So much controversy and so much drama. I feel like it’s really taking away from the process and I hope that the UCC agrees with that,” they said.

The examiner’s report with respect to the CEL token speaks for itself, a UCC representative acknowledged.

“There was a lot of manipulation of the token and it was used in extremely improper ways by insiders and that part is not lost on us,” said the rep.

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Source: https://www.theblock.co/post/207291/celsius-creditors-contemplate-next-steps-following-examiner-report?utm_source=rss&utm_medium=rss