Litigation Follows Settlement with Over 1,500 Account Holders and Recovery of Nearly $100 Million
Non-Settling Account Holders Can Expect Vigorous Pursuit in Court by the Litigation Administrator
NEW YORK--(BUSINESS WIRE)--On July 1, 2024, the Celsius Litigation Administrator (the "Litigation Administrator") began filing complaints in the United States Bankruptcy Court for the Southern District of New York against Celsius account holders with more than $100,000 of Withdrawal Preference Exposure ("WPE") who have failed to settle their preference liability. The Litigation Administrator is pursuing the return of preferential transfers (i.e., transfers made in the 90 days prior to the date that Celsius commenced its bankruptcy proceeding – between April 14, 2022, and July 13, 2022).
Amounts recovered through settlement and the litigation process will serve to benefit eligible Celsius creditors, as provided by the Celsius plan of reorganization.
"Account holders who withdrew funds in the days leading up to Celsius' bankruptcy have unfairly benefitted at the expense of other account holders since fulfillment of their withdrawal requests resulted in Celsius being unable to equitably fulfill other withdrawals," said Mohsin Meghji, The Celsius Litigation Administrator. "Account holders with preference liabilities have had ample time and opportunity to settle their preference liabilities at a favorable rate; however, as the settlement offer has since expired, now we intend to pursue the recovery under the Bankruptcy Code of the full value of cryptocurrency transferred during the preference period by these account holders."
The previous settlement offer resulted in the recovery of nearly $100 million and the resolution of more than a half billion dollars of preference liabilities through settlement agreements with over 1,500 account holders.
Account holders with outstanding preference liabilities will be responsible for paying their own legal costs and expenses related to defending the litigation. Stakeholders with questions can refer to cases.stretto.com/CelsiusLOC, which will be updated on an ongoing basis as needed.
Advisors
White & Case LLP and ASK LLP are serving as legal co-counsel, M3 Partners is serving as Litigation Administrator, and C Street Advisory Group is serving as strategy and communications advisor to the Litigation Administrator.
Contacts
Media Inquiries
celsius@thecstreet.com
