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Frm my understanding, Celsius is most likely going to file

for chapter 11 bankruptcy, does that mean that after filing for bankruptcy, only then Simon's plan can be proposed and if enough ppl agree to the proposal, only then it can be implemented?

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I am not sure about chapter 11 here

Nobody pays off loans to then file bankruptcy. You file bankruptcy because you don't want to pay anyone back. Celsius actions speak loudly that they want to avoid bankruptcy.

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