Prime Trust Issue Resolved, Fee Examiner Appointed At Celsius Hearing

The mechanism for a potential asset auction for Celsius is now being worked out by the parties involved in the bankruptcy proceedings.

These assets are still in flux since during today’s hearing, crypto custodian Prime Trust consented to give the troubled lender back around $17 million in cryptocurrency.

The court also consented to appoint a fee examiner to look into the escalating fees associated with the bankruptcy procedure.

Martin Glenn, the chief bankruptcy judge for the Southern District of New York, heard arguments over the planned bidding process’s timing for assets owned by the mining company and retail platform. In order to address concerns about whether assets qualify as custody as opposed to other goods, Celsius’s attorneys changed the schedule. Now, the company wants to complete any sale negotiations before the year is over.

Through the conclusion of its disagreement with custodian Prime Trust, Celsius could get extra money. Prior to the partnership ending, Prime Trust held approximately $120 million in assets for Celsius and returned the bulk of those monies. However, Celsius sued Prime Trust for the remaining $17 million, claiming that Prime Trust did not return it. In light of the court’s permission, Prime Trust said during the hearing that it will transfer the money back to a Celsius wallet.

Prior to an auction in the bankruptcy proceeding, Celsius has not yet submitted a solo strategy. The independent examiner assigned to the case has just begun their inquiry.

The results of that inquiry may have an impact on how assets are distributed to creditors as well as provide more information about the company’s operations and regulatory interactions, which may have an impact on the auction process.

Setting the dates for a potential auction raises some concerns about how to protect the estate’s remaining assets. The expense of bankruptcy proceedings may deplete already limited finances that are often destined for creditors. This was the primary issue brought up before the court appointed the independent examiner, which resulted in a more focused probe than originally planned.

To assess the monthly fee statements submitted by hired experts during the bankruptcy procedure, the court has now appointed a new examiner. Christopher Sontchi, a judge, will fill the position. Prior to leaving his position as a bankruptcy judge in the District of Delaware, he worked as an international judge on insolvency cases for the Singapore International Commercial Court. He also focused on mediations and arbitrations.

In July, Celsius started the Chapter 11 procedure. On November 1, the case’s next hearing is scheduled.