Celsius, a bankrupt cryptocurrency lender was granted a new exclusivity term that would last until February 15, 2023. The struggling crypto lender now has a few more months to file for a Chapter 11 restructuring plan thanks to the court’s approval.
After two court appearances on December 6, the decision to prolong the exclusivity period was made. In a tweet, Celsius stated that the company had applied for permission to sell stablecoins in order to provide liquidity for ongoing operations.
Celsius launched its platform on June 13 and declared bankruptcy a month later on July 13. The judge has said he will announce his judgment soon, probably next week.
Celsius aims to use the extended time to create a strategy for a standalone business, saying:
“We explore every opportunity to maximize the value that is accessible to us for the benefit of our stakeholders and customers.”
On Nov. 10, Celsius filed a request for an extension of the exclusivity period in the hope of achieving significant development.
Restructuring is the process of putting into action a business plan to change a corporation’s organizational structure or financial situation under government oversight due to financial pressure.
Celsius today filed a motion requesting approval to extend the Exclusivity Periods in our cases. This is the period when Celsius has the exclusive right to submit a plan of reorganization.
— Celsius (@CelsiusNetwork) November 10, 2022
Withdrawals were stopped on June 13 due to harsh market conditions, and a month later, on July 13, the bankrupt cryptocurrency lender filed for bankruptcy.
David Barse, the founder and CEO of the index company XOUT Capital and a “pioneer” in distressed investing, was hired as a new director to lead Celsius through the restructuring process.
The crypto lending company reported a $1.2 billion balance difference in its bankruptcy petition, but the true gap ended up being more than $2.85 billion. At $4.72 billion, user deposits made up the majority of the company’s liabilities.
Celsius’ assets, however, include CEL tokens worth $600 million, mining equipment worth $720 million, and $1.75 billion in other cryptocurrencies.
