Celsius bankruptcy judge approves 72.5% claim settlement for custody accounts
|- Custody account users would be able to claim 72.5% of their crypto holdings.
- The users who opt in would, however, give up the right to pursue any litigation going forward.
- Back in January, Celsius was considering issuing a new token to repay its creditors and free itself of bankruptcy.
Celsius was among the key players back in 2022, which marked the beginning of the first crypto market contagion in Q2. Since then, the creditors of the platform have been attempting to regain their investments, with the court finally providing them with a potential solution.
Celsius bankruptcy pain to lessen
The United States bankruptcy court judge, Martin Glenn, approved the settlement agreement giving Celsius custody account holders the right to receive 72.5% of their crypto claims. The ruling in favor of the account holders will only be viable if the settlement between Celsius debtors, custody account holders and unsecured creditors is approved by the parties.
However, the agreement came with certain ties that limited those who accepted the settlement from pursuing any litigation, including seeking relief from the automatic stay, turnover, or other claims or causes of action.
As per the settlement agreement, those who opt-in would receive their 72.5% claim in two distributions. The first 36.25% would be distributed upfront, and the remaining 36.25% is set to be given upon plan resolution, as noted by the court. Although custody members under the $100k threshold could claim up to 100% of the amount, those who are not would be able to claim 72.5%.
Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).
— Cam Crews (@camcrews) March 21, 2023
Bankruptcy Court: The #Celsius Custody settlement is approved. Will be optional for customers. 30 days to review. Those who opt in will get 72.5% of their claim in two distributions 36.25% up front and 36.25% upon plan resolution (or at end of year).
— Cam Crews (@camcrews) March 21, 2023
Continued Efforts to Resolve Issues
Nearly nine months since the Chapter 11 filing, Celsius is still attempting to make its creditors whole by strategizing methods of repaying them and eliminating their losses. This was reflected in the statement from the company back in January when it considered issuing a new token to free itself of bankruptcy.
The new token could have brought in more money for the token and customers, which would, in return, increase the speed of recovery. However, no update on the same has been given by Celsius since.
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