Former Celsius CEO Forfeits Claims, Clearing Path for Additional Creditor Distributions
Former Celsius CEO Alex Mashinsky and three related entities have waived their rights to distributions from Celsius’s Chapter 11 bankruptcy estate. The agreement, filed Monday in the U.S. Bankruptcy Court for the Southern District of New York, permanently bars these parties from receiving any recovery.
Under the stipulation, all claims submitted by Mashinsky and his entities (AM Ventures Holdings Inc., Koala1 LLC, and Koala3 LLC) are withdrawn, disallowed, and scheduled to receive no distribution. This action removes competing claims, enabling Celsius to distribute assets previously earmarked for Mashinsky and his entities to other eligible creditors.
In Brief
- Former Celsius CEO Alex Mashinsky and three related entities waived rights to bankruptcy distributions.
- This move allows Celsius to distribute funds previously reserved for competing claims.
- Celsius has already paid over $2.5 billion to creditors this year.
All entities involved forfeit claim rights, ensuring that restricted assets are now available for distribution to other creditors, a process subject to the court’s continuing jurisdiction.
Mashinsky is currently serving a 12-year federal prison sentence for defrauding Celsius customers and misleading investors during the company’s financial downturn.
Road to Recovery
Celsius filed for Chapter 11 bankruptcy protection in July 2022 due to a liquidity crisis. The company subsequently resolved its bankruptcy proceedings through settlements, transitioning its focus to maximizing creditor recoveries.
Mashinsky pleaded guilty to multiple counts related to customer fund mismanagement and CEL token manipulation. Prosecutors sought a 20-year sentence but appealed for leniency, citing his guilty plea and military service. By August 2024, approximately $2.5 billion had been paid to nearly 251,000 creditors, covering most claims, while payments to the remaining eligible creditors are pending.
Note: The “Daily Debrief Newsletter” section and the decorative corner elements (span elements with “border-t-4”, etc.) found in the original document have been excluded as they appear unrelated to the core news content and are not appropriate for a professional news article format.
