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Celsius Presents Creditors Plan To Revive Business Operations
Celsius executives have presented creditor representatives with a plan to revive business operations, a lawyer for creditors told the judge presiding over the crypto lender’s bankruptcy proceedings.
Muskaan T.
1:29 15th Sep, 2022
Markets

Representatives for creditors and customers trying to claw back money from bankrupt crypto lender confirmed that Celsius's leadership has contacted them about a plan to revive business operations.

But the representatives, known collectively in proceedings as the Committee of Unsecured Creditors (UCC), have not thrown support to the proposed revival plan from the firm's executives, details of which leaked after they were discussed at an all-hands meeting.

Gregory Pesce, a lawyer for the committee, addressed ambitions by Celsius executives to restart business operations for the company.

"The debtors, as has been widely reported, met with the UCC," said Pesce. "They presented a concept. UCC does not support that concept. We don't support any end game here."

A recording of a company all-hands meeting circulated yesterday in which the two executives detailed their plan for a comeback, saying they hoped to pivot the firm towards more custodial services and charge fees for certain types of transactions, a project code-named "Kelvin." In that recording, Celsius executives Alex Mashinsky and Oren Blonstein said they had already met with UCC representatives to present the proposal and "got positive feedback." The recording was originally obtained by the New York Times.

Pesce told the court that Celsius, "have committed to running a process to market check what is out there and whatever the management team might ultimately produce," he said. Pesce added that creditor representatives are talking to Celsius and want the company to file a full plan in court.

In his leaked remarks, Blonstein indicated that the firm would propose the new business plan as a means of repaying customers who lost funds through the company. Celsius recently got approval to honor withdrawals for certain custody customers, but it's unclear what remedy other types of users will see. In a recording posted online by Tiffany Fong, a Celsius customer and public commentator, Blonstein can be heard describing a proposal to restart staking and lending services.

Celsius' CEL token saw a brief spike in the hours after the recording leaked.

Source: TradingView

Celsius entered Chapter 11 bankruptcy proceedings in July. Since the start of the process, multiple entities have demanded more clarity into the firm's financial management in the lead up to its collapse, including securities regulators. Some contend that Celsius has continuously misled the public as it relates to its financial health. Today's hearing is also ruling on the appointment of an outside examiner, which would create a third-party report on Celsius' management and financials.

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