Celsius Unsecured Creditor’s Committee Makes Progress, Hearing on the Case

The Selected Unsecured Creditors Committee has appointed the law firm White & Case LLP-Pesce & Colodny to represent Celsius’s unsecured creditors in court. It is worth noting that Celsius Network is a US cryptocurrency lending platform. It filed for Chapter 11 bankruptcy protection in a New York court last month. Many of its investors have written to the judge presiding over the case. Pleading with him to assist them in recouping their investment capital.

Many claims they are on the verge of bankruptcy, and have lost their life resources. Such as retirement money, and cannot pay their rent or mortgages, according to letters provided to Judge Martin Glenn. He is in charge of the Celsius case in the Southern District Court of New York. This occurred the day after the announcement of the Celsius second hearing on August 16, 2022.

Potential Conflict of Interest

In a Twitter thread, some creditors expressed concern about a potential conflict of interest regarding Paul Weiss’ attempt to represent UCC. According to Otisa502, Paul Weiss should not have attempted to represent the UCC. They appear to be in a conflict of interest because Ron Deutsch, Celsius’s general counsel, previously worked for Paul Weiss.

I believe it is advantageous to be aware of the insider strategies of the opposition. No legal firm could represent anyone if there were a conflict here. The UCC chose White & Case LLP to represent the interests of unsecured lenders, so the conflict of interest issue was dealt with.

Several Creditors Have a Chapter 7 Liquidation Proposal

Some creditors favor offering depositors the maximum possible haircut from a Chapter 7 liquidation. In a Chapter 7 bankruptcy, assets may be sold to pay creditors. This would result in the secured debt being paid off last. Whereas, nonpriority unsecured debt being paid off before unsecured creditors with priority. Typically, Chapter 7 involves filling out paperwork and having the trustee go over your assets.

Celsius, a bankrupt cryptocurrency lending company, is looking to rehire its CFO for $92,000 per month. Celsius, the insolvent cryptocurrency loan platform, is looking to rehire former CFO, Rod Bolger. Because of his knowledge of the debtor’s industry, this is possible. They have agreed to pay him $92,000 per month.

According to the original motion, Bolger was the company’s full-time CFO. He earned a base salary of $750,000, a performance-based cash incentive of up to 75% of his base, and stock and token options for more than $1.3 million at the top end.

Obligations of Celsius Unsecured Creditor’s Committee

A creditors’ committee has several powers and responsibilities. These include, establishing a restructuring strategy for bankrupt enterprises or deciding whether they should be liquidated. The function of a creditors’ committee is to guarantee that unsecured creditors, who may only be owed tiny sums, are represented in bankruptcy proceedings. A US bankruptcy trustee (appointed in more complicated cases under Chapter 11 processes) is responsible for selecting members of a creditors’ committee from among the debtor’s 20 largest unsecured creditors with claims against them. 

Serving on a creditors’ committee requires a significant time commitment, the likelihood of extended travel, and the risk of making decisions that are contrary to one’s or one’s employer’s interests. Although expenses may be reimbursed, such work is unpaid. The function of a creditors’ committee is to guarantee that unsecured creditors, who may only be owed tiny sums, are represented in bankruptcy proceedings. In more complicated Chapter 11 cases, a US bankruptcy trustee is in charge of choosing members of a creditors’ committee from the debtor’s 20 largest unsecured creditors who have claims against them.

Celsius to Re-Hire Rod Bolger

Celsius Seeks Ex-CFO Rod Bolger Due to his knowledge in the debtor’s industry, Celsius is looking to re-hire its CFO. They have promised him $92,000 a month for a minimum of six weeks. According to a filing filed in the Southern District of New York, the corporation believes Bolger is required to act as an advisor to it while it navigates the bankruptcy process.