Celsius Gets US Court Approval To Pay Shareholders $25 Million In Bankruptcy Case

Celsius Gets US Court Approval To Pay Shareholders $25 Million In Bankruptcy Case

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Celsius Network LLC has received court approval for a settlement that puts an end to a lengthy bankruptcy dispute with preferred shareholders. The agreement involves Celsius Network paying $25 million to the shareholders, avoiding the potential costs of a protracted legal battle that could have reached $600 million, as reported by Bloomberg.

Judge Martin Glenn, overseeing the US Bankruptcy Court, has granted approval for the settlement, effectively resolving one of the most enduring conflicts within Celsius’ Chapter 11 case. The company and its preferred shareholders had been engaged in disputes regarding the priority of payment for investors and other intricate legal matters. Typically, the owners of a bankrupt company do not receive any recovery until creditors have been fully repaid.

During a court hearing in Manhattan, company attorney Christopher S. Koenig noted that if the legal battle had continued, the associated fees would have been substantial. Furthermore, had Celsius been unsuccessful, the shareholders may have been entitled to up to $600 million.

As per the settlement, investors who wish to continue pursuing litigation against Celsius can do so within the bankruptcy court. The agreement was negotiated with a group representing $600 million of the $690 million worth of preferred equity, according to shareholder attorney Andrew Leblanc’s statement in court.

At the core of the dispute was the interpretation of the company’s customer agreement, specifically whether customers were entitled to seek compensation solely from Celsius Network LLC or if they could also make claims against the parent company, Celsius Network Ltd. Shareholders argued that their equity stakes in Celsius entitled them to value derived from the company’s crypto mining operations, loan book, and other assets, as outlined in court documents.

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