Crypto News- Retail cryptocurrency borrowers are vigorously contesting the Celsius Network’s bankruptcy plan, asserting that it unfairly advantages institutional lenders while disadvantaging individual clients.
Celsius Network Bankruptcy Strategy Faces Resistance as Retail Crypto Borrowers Offer 45 Million Dollars Resolution
Angel investor Johan Bronge, who had previously engaged in bitcoin-backed loans with Celsius, articulated his concerns in a formal letter to the court. Bronge emphasized a critical flaw in the proposed plan, which allows institutional lenders to repay their loans and regain access to their cryptocurrency holdings, a privilege denied to retail borrowers.
Bronge also raised objections regarding the merging of application dates with current market prices for collateral valuation. He expressed apprehensions that this amalgamation could potentially lead to retail borrowers forfeiting more of their crypto collateral compared to the concessions extended to all creditors. Additionally, Bronge criticized the limited choices afforded to creditors, who lack the ability to vote on whether Celsius should undergo reorganization or cease operations.
In response to these legitimate concerns, Bronge formally petitioned the court to grant retail borrowers equal treatment, permitting them to settle loans and retrieve collateral on par with institutional lenders. He staunchly advocated for preserving the original loan agreement terms, implementing consistent valuation methodologies for all collateral, and granting creditors the right to participate in decisions regarding Celsius’s future.
Simultaneously, a noteworthy development has emerged: a tentative $45 million agreement between Celsius and Core Scientific, aimed at resolving a longstanding legal dispute. Pending approval from courts in Texas and New York, this agreement would entail Celsius disbursing $14 million in cash.
In a separate milestone, Celsius Network recently obtained approval from a U.S. bankruptcy judge to solicit creditor consent for its restructuring plan. The core objective of this proposal is to emerge from Chapter 11 as a rejuvenated entity collectively owned by its creditors, signifying a pivotal juncture in Celsius’s journey through the intricacies of the bankruptcy process.
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