- The Celsius Network’s creditors are in pursuit of a second disbursement after experiencing a 35% reduction in their corporate account claims.
- A transition from crypto payments to cash has resulted in considerable financial losses for corporate creditors.
- Faller Creditors have lodged a claim demanding an additional $350,596 due to postponed and diminished cash settlements.
Celsius creditors are demanding further compensation after suffering significant setbacks due to payment transitions.
Celsius Corporate Creditors Seek Second Payout Amid Significant Financial Losses
Two significant corporate creditors of the insolvent Celsius Network are seeking additional remuneration, asserting inequitable treatment as opposed to individual account holders under the company’s repayment plan. The creditors, identified as the “Faller Creditors,” have brought their concerns to the court, insisting on fair compensation.
Payment Method Switch: Crypto to Cash
The core issue involves the method of repayment. Originally, creditors like the Fallers anticipated receiving their payments in cryptocurrency forms such as Bitcoin (BTC) and Ethereum (ETH). Nonetheless, Celsius chose to disburse payments in cash. This decision caused delays and substantial financial loss due to the volatile nature of cryptocurrency market prices. The Fallers held over $1 million worth of cryptocurrency assets before Celsius filed for bankruptcy. However, their claim was readjusted to $634,337.93, reflecting the cryptocurrency values at that critical juncture. The eventual cash payments on February 22 and April 22 were considerably less than the original cryptocurrency value, amounting to $634,335.
Comparison of Corporate versus Individual Creditors Treatment
The Faller Creditors have emphasized that their treatment was unfairly biased when compared to individual account holders. They assert that the delay and the change in the method of repayment significantly reduced the cash value realized from their claims, diverging sharply from the original expectations based on cryptocurrency valuations. The creditors allege that their counterparts saw comparatively more favorable conditions and outcomes in the restructuring plan.
Financial Discrepancies and Additional Compensation Claim
Due to the significant delay and transformation in the payment method, the Faller Creditors argue that the cash they received was notably lower than the value they would have obtained if paid in cryptocurrency at prevailing rates. Consequently, they have demanded an additional $350,596 to balance this disparity, inclusive of the interest accrued due to the delay.
Conclusion
This evolving legal battle in the Celsius Network bankruptcy case underscores the complexities and potential pitfalls of crypto-based financial systems. As corporate creditors face substantial losses and seek redress, the outcome of this case may set crucial precedents for future crypto-related insolvencies and the treatment of creditor claims.
