Celsius Network To Extend Deadline For Claims As Lawyer Fees Mount
Celsius Network, a bankrupt crypto lender, intends to file a motion to extend the deadline for users to submit claims by another month.
iexclusivenews reports that the cryptocurrency community has grown impatient, noting that Celsius’ legal fees have continued to mount and are eating away at the lender’s estate.
Celsius Network announced on December 29 that it would seek to extend the current claim deadline from January 3 to early February.
The bankruptcy court is scheduled to hear the motion on January 10, and Celsius anticipates that the Jan. 3 deadline will be extended until at least that date.
During bankruptcy proceedings, creditors who believe they have a right to payment can file claims through the claims process. As of December 29, Celsius’ creditors had filed over 17,200 claims.
Celsius’ creditors, on the other hand, appear agitated, as the company’s administrative fees have continued to mount since its initial bankruptcy filing in July.
According to a December 27 Financial Times report, the fees charged by bankers, lawyers, and other advisers in the bankruptcy case had already topped $53 million.
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For example, a fee statement dated December 15 from one of the law firms representing Celsius, Kirkland & Ellis, requested a fee of more than $9 million for work completed in September and October.
In comparison, Celsius Network has only set aside $44 million to be returned to customers. This money belongs to users who have only ever used the Custody Program. And it represents a small portion of the $4.72 billion in user deposits held by Celsius.
The latest postponement in the proceedings has left some in the crypto community unimpressed, accusing it of being yet another “delay tactic.” One user, for example, wrote: “Stop wasting time, stop extending, just go on with proceedings and give me my money back!!!!” Another simply stated: “Stop wasting time and my money.”
So the lawyers get millions but I wonder what us small fry folks get?
— Chris (@browncoat1of1) December 29, 2022
In a Dec. 23 tweet, Simon Dixon, founder of global investment platform BnkToTheFuture and an active participant in the Celsius bankruptcy proceedings, stated that by the time users are able to get their funds back from Celsius, they should only expect to receive about half of what they put in.
Prepare yourself for 50% in 6 months with #Celsius Chapter 11 to manage your expectations | Focus on your family over XMas & rebuilding in 2023. https://t.co/E0WeDuPem0
— Simon Dixon (@SimonDixonTwitt) December 23, 2022
On Oct. 20, judge Martin Glenn appointed fellow judge Christopher Sontchi as a “fee examiner” at the request of Celsius, the U.S. trustee, and the unsecured creditors’ committee.
His job is to negotiate and approve the fees set by the case’s lawyers and other professionals.
Celsius’ estate is also paying the fee examiner, with the most recent fee statement submitted on Dec. 21 requesting just under $20,000 for work done in November.