Amid Celsius Network LLC’s bankruptcy saga, the company has proposed a settlement for its high-volume investors facing what is known as “Withdrawal Preference Exposure.” This exposure refers to the potential liabilities of account holders who made significant transfers in the 90 days leading up to the Petition Date, July 13, 2022, as stipulated in the Modified Chapter 11 Reorganization Plan.
Eligibility for this settlement plan is strictly defined. Account holders with exposure exceeding $100,000 can participate, provided they are not ‘Excluded Parties,’ have not voted against the Plan, and have not opted out of releases. Notification of this settlement opportunity is delivered through an email containing a detailed notice and an election form to initiate the settlement process.
For those account holders wishing to settle their exposures, the path is clear but time-bound. They must submit their election form by January 25, 2024, and make the corresponding payment by January 31, 2024.
Celsius Plans Legal Action Against Those Who do Not Comply With Their Request
It is important to note that Celsius account holders with exposure of $100,000 or less do not need to take any specific action. However, investors who do not settle their exposure may face legal consequences from the Litigation Administrator after the Effective Date.
Settlement payments will directly impact the distribution of funds to creditors, thereby increasing the total amount distributed.
Celsius administrators have notified Celsius creditors that those who withdrew more than $100,000 in the 90 days before the bankruptcy date may be required to return part of those funds or face legal action.
Account holders with “withdrawal preference exposure” exceeding $100,000, who are not excluded parties, have not voted against the reorganization plan, and have not opted out, can settle their liability by paying 27.5% of the funds by January 31, 2024. Those who choose to settle will receive a release of all avoidance actions and distributions under the reorganization plan.