Celsius creditors, US gov oppose bankrupt’s lender extension request due to high cash burn rate
The U.S. government and creditors are opposing Celsius’ plans to extend the restructuring plan through June 30, according to a Feb. 8 court filing.
Celsius wanted to extend the exclusive filing period to March 31 and the exclusive solicitation period to June 30, according to January 25. filingThe company said it could have to liquidate its assets if it can’t “reach final agreement” on its restructuring plans.
Celsius cash burn rate
Creditors oppose the extension because of the high cash burn rate in bankrupt companies.
Unsecured creditors of Celsius said the company could hit a “liquidity wall” in the coming months.a creditor Said:
“Based on the debtor’s cash burn rate and the percentage of professional fees that accrue in these cases, the Commission will understand the debtor’s spending rate and the amount of outstanding debt, unless they sell their crypto assets, by 2023. It shows we may be short on cash by June 2020. Administrative bills and costs.”
United States Trustee backed up this view. The trustee argued that it was inappropriate to grant such an extension given the “speed at which experts consume the debtor’s assets.”
Celsius creditors have concluded that it has been about eight months since the company suspended withdrawals, so the lawsuit must move toward resolution. They added:
“Meanwhile, the lives and finances of many account holders have been disrupted due to the debtor’s past conduct and certain former directors and officers.”
A hearing will be held on February 15th.
Meanwhile, Celsius recently published the names of users who are eligible to withdraw assets from the platform. Independent examiners reported that the business operated like a Ponzi.
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