Celsius’ retail borrowers finally have an answer on who owns the cryptocurrency they deposited into Celsius in exchange for a loan from Celsius – spoiler alert: on November 13, 2023 the bankruptcy court held that Celsius’ terms of service “clearly and unambiguously” gave Celsius ownership of retail borrowers’ cryptocurrency. The bankruptcy court’s decision follows its January 2023 decision which similarly held that the cryptocurrency of Celsius’ “Earn” customers also belonged to Celsius because the terms of service similarly unambiguously granted Celsius title ownership.
The liquidity-fueled lull in restructuring activity provides both an interesting historical echo of the late 1990s and a useful opportunity for market participants to take note of a deceptively interesting opinion in Giuliano ex rel. Consolidated Bedding, Inc. v. L&P Financial Services Co. (In re Consolidated Bedding, Inc.), Case No. 19-50727, 2021 WL 2638594 (Bankr. D. Del. June 25, 2021) (Shannon, J.).
In early November, the Ninth Circuit held in In re New Investments, Inc. that a debtor was required to “cure” defaults to an agreement using a post-default interest rate, overturning its prior, decades-old decision In re Entz-White Lumber & Supply, Inc., which had held that a debtor could cure agreements at pre-default interest rates.
Background
Creditors seeking to file an involuntary petition against a debtor may want to consider doing their due diligence before using it as a tool in their ongoing disputes with a debtor.
On Friday, the Florida Office of Financial Regulation closed Horizon Bank, headquartered in Bradenton, Florida, and appointed the FDIC as receiver for the bank. As receiver, the FDIC entered into a purchase and assumption agreement with Bank of the Ozarks, headquartered in Little Rock, Arkansas, to assume all of the deposits of Horizon Bank.
On Friday, the Georgia Department of Banking and Finance closed Satilla Community Bank, headquartered in St. Marys, Georgia, and appointed the FDIC as receiver.
On Friday, the Michigan Department of Financial and Insurance Services closed the Bank of Ann Arbor, headquartered in Ann Arbor, Michigan, and appointed the FDIC as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Bank of Ann Arbor, headquartered in Ann Arbor, Michigan, to assume all of the deposits of New Liberty Bank.
On Friday, the Missouri Division of Finance closed Southwest Community Bank, headquartered in Springfield, Missouri .
On Friday, the Illinois Department of Financial Professional Regulation - Division of Banking closed Midwest Bank and Trust Company, headquartered in Elmwood Park, Illinois, and appointed the FDIC as receiver.
Today, the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law held a hearing entitled “Ramifications of Auto Industry Bankruptcies; Part II.” Testifying before the committee was Ron Bloom, Senior Advisor, U.S. Department of Treasury.