Celsius and Voyager Bankruptcy Proceedings

Celsius and Voyager filed for bankruptcy. Before your funds are returned, the companies must first go through bankruptcy proceedings.

First, the debtor (Celsius) files for bankruptcy and a bankruptcy estate is created. It's made up of all the assets of the debtor wherever located. The estate is managed by the veteran possession, which is really just the management of the company itself.

Next, an official committee is appointed, usually made up of the seven largest unsecured creditors. Their purpose is to make sure the interests of all unsecured creditors are protected and to make sure there is no bankruptcy fraud.

Then, creditors will have a chance to file a "proof of claim". This is a form that proves your debt. You attach evidence of some type of agreement between you and the debtor (Celsius).

After that, it's a series of investigations. Investigating pre-petition actions of the debtor, and post-petition actions of the debtor. Seeing if there's any preference actions (anything that the debtor may have paid out within the last 90 days prior to filing the bankruptcy).

Next, Celsius has to propose a chapter 11 plan. They have 120 days from filing to propose a plan, but it can be extended up to 300 days. The plan will then outline how creditors will be treated and how funds will be dealt with.

They will then prioritize who gets paid first. Typically, administrative, legal, and other expenses get top priority. Unsecured creditors are paid last.

Unsecured creditors get paid on pro rata. Typically, unsecured creditors with higher claims will get paid faster than those with smaller claims. If you claim $100,000 and someone else has a claim of $5,000, the person with the higher claim will be paid first.

Disclaimer: The information provided pertains to the United States. Information contained in this post and in the comments is intended for general informational and educational purposes and does not constitute legal advice. Reading this post, reading the comments, receiving a reply to your comment, or sending a direct message to this account does not create an attorney-client relationship. Contact an attorney for legal advice regarding your specific situation.