As Celsius Network LLC, et al., Case Number: 22-10964 (MG), proceeds in the Bankruptcy Court for the Southern District of New York (the “Court”), the following summarizes two important case updates as of November 18, 2022:

Setting of Bar Date for Filing Proofs of Claim:

On November 16, 2022, the Court entered an order (the “Bar Date Order”) setting the date and time by which all creditors must file their proof of claim(s) in the Chapter 11 Cases. Proof of claim forms must be submitted and received by the Debtors by 5:00 p.m., prevailing Eastern Time on January 3, 2023 (the “General Claims Bar Date”). Proofs of Claims submitted by governmental units, on the other hand, must be actually received by 5:00 p.m., prevailing Eastern Time on January 10, 2023 (the “Governmental Claims Bar Date”).

As outlined in the Bar Date Order, with few exemptions, any claim that is not filed by the respective bar dates listed above will be barred from being asserted against the Debtors unless such claim is already listed on the Debtor’s Schedules. If the Debtor has listed a claim as contingent, unliquidated, or disputed, it is critical that a proof of claim be filed in order to reserve a right to the claim.

What must be included in the proof of claim:

• The proof of claim must be in English;

• For any cryptocurrency claims held in an account on the Debtors’ platform, the claim must state the type of cryptocurrency and the number held;

• For any non-cryptocurrency claims, the claim must include an amount denominated in U.S. Dollars;

• Must be signed or electrically submitted via the claim agent’s webpage;

• Include as much supporting documentation as can be provided unless voluminous, in which case an explanation should be provided as to what was not included;

• Form must conform substantially with the form provided by the Debtors.

Personal information not to be included:

• The proof of claim should not include a complete social security or tax ID number but only the last 4 digits;

• Should not include a full birthday (only the year);

• If the creditor is a minor, only initials should be used;

• Only the last 4 digits of financial account numbers should be used.

As we have mentioned before, given the complexity of the claim it remains our recommendation that all parties file a proof of claim regardless of how their claim is scheduled.

Approval of action procedures for retail assets:

As mentioned in our previous updates, the Court has approved procedures for an auction of the Debtors’ assets (in particular, the Debtors’ retail assets). Part of the controversy behind this auction is that parties are being asked to submit bids prior to a determination of how the company plans to treat the Custody accounts with a decision on the Earn accounts not even on the near horizon.

The Debtor has made it clear that the approval of these auction procedures is not a commitment to sell assets and is at least purporting to be considering restructuring and remaining a standalone entity as an alternative. Note the proposed sale here would take place under a plan of reorganization and not as a separate asset sale under Section 363 of the Bankruptcy Code.

Though the dates and deadlines are subject to change, the current deadlines are as follows:

Initial Bid: The initial bid deadline for retail assets is set for November 21, 2022, at 4:00 p.m. ET. This non-binding initial bid must include a price including for both cash and non-cash components as well as any conditions. Submitting this initial bid does not obligate the bidding party to bid further, nor will it definitely allow one to submit a final bid as the Debtor still needs to approve final bid candidates prior to giving them confidential information about the Debtor.

Final Bid: Final bids are due on December 12, 2022. In the final bid, the Debtors are looking for bids that, in theory, the Debtors can be ready to sign. This includes a signed transaction document with any markup that the bidder requests as well as committed financing, a good faith deposit of the greater of 10 percent of the bid or 20 million dollars. Under these bid procedures, the Debtors are unwilling to accept any financing or other conditions There are several other requirements including that bids provide information on how with a potential buyer of the assets will deal with the Debtors. It is highly unlikely that any particular bid made on December 12, 2022, will be accepted in its form as submitted.

Auction and Sale Hearing: If needed, a virtual auction may take place on December 15, 2022, and a sale hearing is set to take place on December 22, 2022. If other cases in this area are a guide, it is likely that these deadlines are likely to be extended.

Many creditors are hoping that the auction will lead to a buyer taking over accounts that will include Earn accounts, thus allowing creditors to keep their accounts or a percentage of them intact. While this is in the realm of possibility, it is not a likely outcome.

An important element of the approved bid procedures is that it will allow the Debtors to sell the assets in question free and clear of liabilities.

In many ways, these bid procedures give the Debtors the ability to test the waters to gauge the interest of buyers in their assets without committing themselves to anything. As such, there is little that we can learn from here (for now) as to the final direction that the case is going to take or how claimants are going to be paid back.

A full listing of action deadlines is as follows, though may be subject to change: