Bankrupt
crypto
lender
Celsius
Network’s
litigation
administrator
has
initiated
legal
action
against
account
holders
who
have
not
settled
liabilities
related
to
preferential
transfers
made
in
the
90
days
before
the
firm
filed
for
bankruptcy.
The
lawsuits,
filed
in
the
US
Bankruptcy
Court
for
the
Southern
District
of
New
York,
target
those
with
more
than
$100,000
in
Withdrawal
Preference
Exposure
(WPE).
The
move
follows
a
successful
settlement
with
over
1,500
account
holders,
resulting
in
the
recovery
of
nearly
$100
million.
The
settlements
addressed
more
than
$500
million
dollars
in
preference
liabilities,
providing
significant
relief
to
eligible
Celsius
creditors.
Celsius
Litigation
Administrator
Mohsin
Meghji
said:
“Account
holders
who
withdrew
funds
just
before
Celsius’
bankruptcy
have
benefitted
unfairly,
impacting
other
account
holders.
These
individuals
had
ample
opportunity
to
settle
at
favorable
rates.
Now,
we
will
pursue
the
full
value
of
cryptocurrency
transferred
during
the
preference
period
as
stipulated
by
the
Bankruptcy
Code.”
Substantial
withdrawals
during
the
preference
period,
from
April
14,
2022,
to
July
13,
2022,
contributed
to
a
significant
financial
imbalance
at
the
firm,
which
eventually
filed
for
bankruptcy
following
the
preference
period.
Former
Celsius
CEO
Alex
Mashinsky
and
other
executives
are
facing
charges
of
fraud
and
market
manipulation,
which
contributed
to
the
company’s
downfall.
The
company
emerged
from
bankruptcy
earlier
this
year
after
implementing
a
reorganization
plan
approved
by
creditors.
The
plan
aims
to
return
up
to
85%
of
holdings
to
creditors.
The
recovered
funds
from
the
ongoing
litigation
are
intended
to
benefit
the
creditors
in
line
with
the
Celsius
reorganization
plan.
The
reorganization
plan
also
includes
provisions
for
creditors
with
funds
in
Celsius’
interest-bearing
Earn
program,
allowing
them
to
receive
a
portion
of
their
assets
in
crypto
and
shares
of
the
new
company.
The
aggressive
legal
action
highlights
Celsius’
commitment
to
ensuring
equitable
treatment
of
all
account
holders
and
the
integrity
of
the
reorganization
process.
Mentioned
in
this
article
Go to Source
Author: Assad Jafri
