Customers of Celsius Network Face Legal Action Over Withdrawals
Bankrupt crypto lender Celsius Network is taking legal action against customers who made large withdrawals within 90 days before the company declared bankruptcy. The bankruptcy managers are demanding that affected customers return some of their funds or potentially face further legal consequences.
Settlement Demands for Celsius Network Customers
A filing published on Tuesday revealed that customers who withdrew over $100,000 within the specified 90-day period find themselves at the center of the legal dispute. These customers have been notified through an official filing outlining the procedures for settling their withdrawal preference exposure.
The bankruptcy managers have determined that customers with withdrawal preference exposure greater than $100,000 must settle their claims or obtain a court order ruling to avoid potential liability.
The Modified Joint Chapter 11 Plan of Reorganization
The bankruptcy plan offers an Account Holder Avoidance Action Settlement, where account holders meeting certain criteria can release avoidance actions by accepting the plan on all claims and providing a payment equal to 27.5% of their withdrawal preference exposure.
The distribution agent is not obligated to make distributions to account holders with unresolved withdrawal preference exposure until their claims are settled or resolved with the litigation administrator after the plan’s effective date.
Settle Now or Face Consequences
A deadline extension has been granted to allow affected customers to settle their withdrawal preference exposure and receive a release of all avoidance actions. The effective date of the plan is expected to occur around January 31, 2024.
Customers must submit the settlement payment and election form by January 25, 2024. Failure to do so may result in rejection of the settlement payment. Failure to settle by January 31, 2024, may lead to further correspondence or actions by the litigation administrator.
Conclusion: The Outcome of the Account Holder Avoidance Action Settlement
As customers navigate this unexpected legal action, the crypto community awaits further developments in this ongoing bankruptcy case. The outcome of the Account Holder Avoidance Action Settlement will provide clarity on resolving withdrawal preference exposure claims and the subsequent distribution of funds.
Featured image from Shutterstock, chart from TradingView.com
Hot Take: Celsius Network Customers Face Legal Consequences for Withdrawals Before Bankruptcy
Customers of Celsius Network are now being pursued legally after making significant withdrawals within 90 days prior to the company’s bankruptcy declaration. The bankruptcy managers are demanding that these customers return some of their funds or face further legal repercussions. This filing highlights the specific criteria for settlement and emphasizes that customers with withdrawal preference exposure over $100,000 must settle their claims or seek a court order ruling to avoid potential liability.
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