- Two Celsius investors have requested that a committee be formed to defend their interests in bankruptcy proceedings.
- Investors claim that the process revolved around the clients regardless of the shareholders.
- The petition asked the court to set a cap on US dollar value claims as of the date of the bankruptcy petition.
On Thursday, two shareholders of crypto lending platform Celsius filed a motion with a commission to defend their interests in bankruptcy proceedings. Investors were expressing concern that the bankruptcy process was overly focused on retail clients.
The law firm Milbank LLP filed the application in the Bankruptcy Court for the Southern District of New York to establish the Preferred Stock Commission. The committee will represent Class A and B shareholders and give them priority in the sale of GK8 custodian company and Celsius mining activities.
Without these steps, the lawsuit would “be unfairly and unfairly tilted in favor of consumers to the detriment of stockholders,” according to the two companies.
Not only does the Unsecured Creditors Committee (UCC) focus on maximizing value for customers, regardless of shareholders, but debtors also make it very clear that the UCC is their partner, and these cases are all about a customer.
According to the attorneys, the agent must represent the stockholders in the legal battle ahead of the proposed reorganization plan.
Furthermore, the petition asks the court to set a claim ceiling equal to the US dollar value of the claim as of the date the bankruptcy petition was filed. If bitcoin prices rise during the proceedings, the stock holders – not the customers – will benefit. But in the event of the cryptocurrency going down, customers suffer.
Thomas Brasil, founder of 507 Capital, which specializes in bankruptcy investing, commented, “This is a complete bomb that will likely alienate the entire body of creditors and the entire constituency. It will likely lead to World War III in the case of a percentage point.”
The bankruptcy process after Celsius Investors Claims focused on customers for the first time in the issuance of Coin.