Attorney Denies Claim of Celsius Bidding Process Being Abandoned

Legal counsel representing Celsius’ Official Committee of Unsecured Creditors has refuted recent claims that submitted bids for the crypto lender’s assets were rejected.

Last week, crypto journalist Tiffany Fong claimed she received documents detailing the bids on Celsius’ crypto assets, which “for the most part, abandoned.”

According to Fong, Binance, Bank to the Future, Galaxy Digital, Cumberland DRW, and Novawulf had submitted their bidding proposals for Celsius’ assets, but the lender abandoned them. The journalist said she had gained access to the bids in December.

A “Categorically False” Claim

In response to those claims, Gregory Pesce from White & Case LLP, the law firm representing Celsius’ Official Committee of Unsecured Creditors, said during a recent Twitter space that reports of the abandoned bids are “categorically false.”

“This leak is likely only going to reduce creditor recoveries because whether the information is accurate or not, it provides people that are still in the process to whom we’re speaking every with day with information about how things might or might not be unfolding and that reduces the flexibility that the committee has in dealing with these parties to get the best possible outcome,” the attorney said.

Pesce stated that investigations are ongoing to determine the source of the false claims. He added that there are “significant concerns that a potential investor that was involved in the process may be trying to manipulate it for their own benefit.”

The Way Forward

During the Twitter space, the attorney also discussed the “recovery corporation” plan proposed by Celsius’ lawyers to exit bankruptcy and repay creditors. The plan aims to restructure the crypto lender into a publicly traded recovery corporation that could issue a debt token to repay creditors.

The lawyer stated that the plan was still on the table. However, the committee is also “running down a number of other options in particular,” such as selling off Celsius’ mining business and winding down the company or “transferring the crypto to a third party.”

Celsius filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court of the Southern District of New York in July after facing a severe liquidity crunch from extreme market conditions.

Meanwhile, Shoba Pillay, an independent examiner appointed by the New York Bankruptcy Court, revealed in a recent filing that Celsius misused customer funds for years before its collapse.