A married couple, Sheri Anne Faller and Bernard Jacob Faller, who held corporate accounts at Celsius Network, has filed a motion for a second payment from bankruptcy proceedings.
The couple filed a motion on June 3 and a hearing is scheduled for June 27. The matter follows allegations that they and other business debtors received 35% less payments than non-corporate customers.
The couple’s motion follows widespread complaints from corporate creditors about delayed payments and receiving cash instead of cryptocurrency, leading to financial losses.
According to the filing, the Faller Creditors had over $1 million worth of cryptocurrency in their Celsius accounts before the bankruptcy. This claim was reduced to $634,337.93 in Bitcoin and Ether (approximately 7.38 BTC and 123 ETH) to be paid out on January 16. However, the payments were made after the deadline.
The four companies, BFaller RD, BFaller ROTH RD, SFaller TRD RD, and SFaller RD, are together known as the “Faller Creditors”. According to California corporate records, these companies are Individual Retirement Accounts (IRAs) controlled by a married couple.
On January 19, a Celsius representative advised the Fallers that their payments will be in cash because their accounts did not rank among the top 100 corporate accounts based on asset value.
Despite initially agreeing to cash payments, the Fallers did not receive the funds until February 22, and could not withdraw them until March 8. Additional payments were made in April, totaling approximately $634,335. The pair alleges that these payments were much less than the value of the cryptocurrency owing, and they are seeking an extra $350,596 to cover the difference and interest.
The couple initially agreed to receive the monetary value of their cryptocurrency on January 19 but claimed the debtors failed to pay. On February 13, they wanted payment in crypto owing to the delay. In response, the debtors reportedly informed them that they could not be paid in crypto because they were not on the top 100 list of corporate creditors.
They finally received a wire transfer of $414,733 on February 22, but they allege they were not allowed to withdraw the monies until March 8. On April 22, more payments of $219,602 were received, bringing the total to $634,335.
The couple claims the cash value they received is much lower than the value of the Bitcoin and Ether they were owed based on prevailing rates. They estimate they should have received $973,955. They are requesting an additional $338,611 plus $11,984 in interest, totaling $350,596.
The Faller creditors are not alone in their concerns about Celsius’ handling of corporate accounts. In March, another corporate creditor claimed to have gotten 30% less than agreed. Celsius responded by asserting that it sold consumers’ cryptocurrency on January 16 as mandated by the bankruptcy plan. It concluded that it could not pay creditors for cryptocurrency that it no longer possessed.
The new lawsuit argues Celsius didn’t make reasonable efforts to distribute funds, criticizing the use of Coinbase and PayPal instead of alternatives like Kraken and Bitgo. It also considers the three-month delay between converting cryptocurrency to money and paying payments excessive. Celsius previously defended its activities, arguing that it took reasonable attempts to pay its corporate debtors on time.
Wesley Chang, a Celsius corporate creditor, claims he experienced damages owing to payment delays. An omnibus hearing on his request is scheduled for June 27.
Also Read: Celsius Pursue $2 Billion Recovery from Withdrawn Customers
