Creditor Approval Tips to 98% for Celsius' Restructuring Proposal
In a significant turn of events, the creditors involved in the Celsius bankruptcy have approved a new plan that promises a fresh start for the embattled crypto lending platform. The plan, which is yet to be confirmed at a hearing scheduled for October 2 in the Southern District of New York of the United States Bankruptcy Court, is estimated to be worth approximately $2 billion.
Under the approved plan, Celsius (the Debtors) will distribute money to creditors and equity in a new company known as "NewCo." The distribution will include approximately $2 billion worth of Bitcoin and Ethereum, as well as shares in NewCo. The disclosure statement for the plan was submitted on August 17, and the filing was made on September 25 by the bankruptcy firm Stretto.
The plan involves several key aspects. NewCo will operate and expand the Debtors' Bitcoin mining operations, including the construction of a 100 megawatt plant. Prominent companies like miner US Bitcoin Corp. and venture capitalist Arrington Capital are among the group of buyers. NewCo will also stake Ethereum and monetize the Debtors' other illiquid assets.
In addition, the plan includes the acquisition of $450 million to $500 million in liquid cryptocurrency funds. This acquisition is expected to bolster NewCo's resources and enable it to create new, value-adding business opportunities.
The majority of the classes voted in favor of the plan by more than 98%. However, the name of the administrator of the Celsius Group insolvency who approved the plan and will reimburse creditors with money and shares through NewCo is not yet publicly disclosed.
This new agreement marks a significant step forward for Celsius and the crypto industry as a whole. As the industry continues to evolve, it is clear that innovative solutions like the one proposed by this plan will play a crucial role in navigating the challenges ahead.
