Celsius investors’ lawyers filed a petition to represent the interests of the court

An international law firm representing Celsius Investors Group has filed a motion to appoint a committee to represent their interests in the crypto lender’s bankruptcy case.

In a filing Thursday in the U.S. Bankruptcy Court for the Southern District of New York, attorneys at the Milbank law firm asked for the appointment of an “official preferred equity committee” to represent certain Celsius shareholders. According to the filing, the equity holders “urgently require their respective fiduciaries” to seek representation from the Celsius Debtors and Unsecured Creditors Committee, or UCC.

“The importance of the trustee to protect the interests of equity holders is particularly important when one considers the practical facts of these cases: There are only two groups of real economic stakeholders – retail customers and equity holders,” the court’s filing said. “UCC’s laser is focused on maximizing value for its clients, regardless of equity holders, but borrowers have clearly shown that UCC is their partner, and these cases are ‘all about the client’.”

The legal team added:

“There is a need for an estate trustee to take the other side of this argument before a reorganization plan is filed that violates the bankruptcy code. […] A select equity committee must be appointed now – and not after the fact – or these cases will unfairly and unfairly disadvantage the client equity holders.

The shareholders included investors in Celsius’ $750-million Series B financing starting in November 2021, one of the last before the company files for Chapter 11 bankruptcy in July 2022. A hearing on Milbank’s request will be held on October 6 – the same day. The court was scheduled to rule on a petition to allow Celsius to sell its stablecoin holdings to the exchange to “fund the operations of the borrowers.”

Related: The Celsius founder declared in court that his equity was ‘worthless’

Since filing for bankruptcy in July, Celsius has faced legal challenges from many customers seeking to get their money back. In August, a group of lenders filed a complaint seeking to recover more than $22.5 million worth of crypto in the lender’s escrow. However, the value of Celsius’ CEL token has roughly doubled since the Chapter 11 filing, from $0.78 to $1.54 as of press time.

Cointelegraph reached out to Milbank, but did not receive a response at the time of publication.