Celsius Network has taken a decisive step by releasing a new filing, requesting account holders who withdrew $100,000 or more worth of crypto within the 90 days leading up to the network’s bankruptcy petition date to promptly return the funds.
Celsius Pre-Bankruptcy Withdrawal Funds Recovery
Bankrupt cryptocurrency lending company Celsius Network has issued a filing for the settlement of Withdrawal Preference Exposure (WPE) to the United States Bankruptcy Court. The crypto lending platform submitted the official court filing on Thursday, January 9.
The court filing which targets large investors has requested account holders with WPE of $100,000 and higher to make a settlement payment back to the insolvent crypto company or face legal action.
The settlement order also includes various additional conditions for the affected individuals who have withdrawn the stipulated amount.
According to Celsius, creditors “who are not excluded parties, did not vote to reject the plan on any claims, who did not opt out of the releases under the plan, and who made the WPE settlement payment” will be notified via email to settle their liability.
In contrast, account holders with WPE of $100,000 or less are exempt from making a settlement pay. Additionally, these individuals will not be receiving an email outlining the settlement procedures.
Celsius Network has issued a deadline of January 31 to make all settlement payments. The filing has disclosed that debtors must receive 27.5% of the WPE on or before the deadline date. Furthermore, account holders can settle their WPE payments using cash, Bitcoin (BTC), or Ethereum (ETH).
The court filing has also disclosed that Celsius creditors who opt to settle before the deadline will be granted a release of all avoidance actions and provided distributions under the insolvent crypto lending company’s reorganization plan.
Consequently, those who fail to settle by the deadline will have their withdrawal preference exposure handled by the Litigation Administration, potentially leading to legal actions to recover the preference they received.
Celsius Network Attaches Conditions For Settlement Deadline
Celsius Network has included several strict conditions to its WPE settlement deadline. According to the filing, account holders who are planning to initiate their settlement payments are requested to submit an election form on or before January 25. Additionally, debtors will begin accepting completed forms by January 17.
The election form will disclose the WPE settlement amount that creditors have previously resolved, along with the remaining amount they are obligated to fulfill.
Additionally, the filing has stated that account holders settling their payments on or within the few days following January 17, can receive early distributions alongside other creditors. While account holders who make their payments by January 31, may experience a delay in their initial distributions.