Celsius Network Seeks Revival Amid Prime Trust’s Chapter 11 Bankruptcy Proceedings
In Brief
Prime Trust and select affiliates have proactively submitted a Chapter 11 Bankruptcy filing to the United States Bankruptcy Court in the District of Delaware.
On August 14, a United States bankruptcy judge granted cryptocurrency lender Celsius Network permission to request creditor approval for its bankruptcy plan, advancing a proposal to emerge from Chapter 11 as a new company controlled by its creditors.
Prime Trust and select affiliates have proactively submitted a Chapter 11 Bankruptcy filing to the United States Bankruptcy Court in the District of Delaware.
Over the last few months, the company failed to fulfill client withdrawal requests. On August 15, Prime Trust revealed that it currently possesses 25,000 to 50,000 creditors, with estimated liabilities between $100 to $500 million. This stands in contrast to its estimated assets valued between $50 million and $100 million. According to a press release, Prime Trust said that the start of the Chapter 11 Cases will result in a transparent process to maximize value for its clients and stakeholders.
Prime Trust reportedly plans to file several motions with the Bankruptcy Court designed to facilitate its orderly evaluation of all strategic alternatives. In addition, the crypto custodian plans to sell all of its assets and operations. These motions are expected to include pleas to carry on paying wages and providing benefits to current employees.
Prime Trust provides financial infrastructure APIs to digital asset and fintech companies. Generally speaking, it simplifies the development of digital assets and makes it easier for clients to build, launch, and scale quickly and compliantly.
On August 14, a United States bankruptcy judge granted cryptocurrency lender Celsius Network permission to request creditor approval for its bankruptcy plan, advancing a proposal to emerge from Chapter 11 as a new company controlled by its creditors.
Not all creditors were happy about the plan. However, the official committee that represents junior creditors supports it and advises Celsius’ clients to vote in favor.
According to court documents, Celsius creditors must submit votes on the proposal by September 20. The company plans to obtain final court approval for its reorganization plan on October 2.
Celsius filed for Chapter 11 protection in July 2022. At that moment, the company reportedly has 600,000 customers with approximately $4.4 billion in interest-bearing Celsius accounts.
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About The Author
Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at valerygoncharenko@mpost.io
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Valeria is a reporter for Metaverse Post. She focuses on fundraises, AI, metaverse, digital fashion, NFTs, and everything web3-related. Valeria has a Master’s degree in Public Communications and is getting her second Major in International Business Management. She dedicates her free time to photography and fashion styling. At the age of 13, Valeria created her first fashion-focused blog, which developed her passion for journalism and style. She is based in northern Italy and often works remotely from different European cities. You can contact her at valerygoncharenko@mpost.io
