The proposal by insolvent crypto lender Celsius to once more extend the deadline for submitting a Chapter 11 reorganization plan has drawn opposition from a number of stakeholders.
The crypto lender, who formally requested Chapter 11 bankruptcy protection in July 2022, submitted a motion on January 25 to extend its exclusivity period, or the time during which it has the sole right to submit a Chapter 11 reorganization plan, by 44 days on March 31 and to continue seeking votes on the plan through June 30.
This demand has been rejected by the U.S. trustee, the Celsius borrowers, and the Unsecured Committee of Creditors.
burning money
“A further extension until June 31st without a reasonable foundation is undesirable,” the U.S. trustee, a representative of the Department of Justice in charge of directing the management of the bankruptcy case, stated in a filing. “Given the rate at which professionals are depleting debtors’ assets.”
Despite the debtors’ lip service about how many creditors needed to see the plan and disclosure statement in this case, he said, “No other case has been given such a protracted extension for solicitation during one petition for exclusivity.”
The protest from the Celsius borrowers mirrored these worries, stating that the conclusion was “spending significant sums of professional expenses and remains quite unpredictable.”
Added duration
After submitting a request in November 2022, the lender already secured court clearance to extend its exclusivity period until February 15.
Celsius’s attorneys stated in the motion filing that the extension was essential in order for the debtors to successfully complete these Chapter 11 proceedings without being hindered by the disruption of competing plans. With the forthcoming filing of the plan, “the debtors are well on their way to a value-maximizing conclusion to their Chapter 11 cases.”