Defunct crypto lender Celsius Network has requested court approval to convert all altcoin holdings to Bitcoin and Ethereum.
Celsius announced the move in an updated reorganization plan filed on June 14 as part of its bankruptcy proceedings in the Southern District Court of New York.
If the bankruptcy court approves the plan, Celsius will begin converting all altcoins that are not designated for Withhold or Custody accounts on July 1.
The coins will be converted using “commercially reasonable efforts” to maximize value, according to the filing.
If any parties are opposed to the plan, they must submit written objections to the court electronically, which will be heard during the June 28 hearing.
Opposing parties must submit their objections by June 26 and appear in court for the aforementioned hearing to have their claims assessed by the court.
The Celsius Network Official Committee of Unsecured Creditors has already greenlit the plan.
Meanwhile, borrowers who have collateral locked up in the defunct firm are worried they will lose out on their funds due to the new plan, which intends to give them the so-called “Set off” treatment.
Setting off the borrowers essentially allows Celsius to negate the collateral it owes them.
David Adler, who is a partner at McCarter & English, LLP and representing a group of such Celsius borrowers, said the plan is a violation of “every consumer lending law out there” and he intends to oppose it in court on behalf of his clients.
According to Adler, Celsius filing the update shows that the firm is trying to “extend exclusivity” to propose the bankruptcy plan without proper justification and he does not believe that such an extension is “warranted.”
“I don’t believe further extensions of exclusivity are warranted given that there has been NO communication from the Debtors to the Borrower Group in the last 6 or 7 weeks (we have been living in total radio silence).”
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