Celsius Bankruptcy Plan: Creditors to Vote on Asset Sale

Permission Granted for Celsius Bankruptcy Plan

Amid the Celsius bankruptcy, a US bankruptcy judge has granted permission for the company to consider creditor approval for its bankruptcy plan. Creditors will vote on Celsius’s plans to sell assets to the Fahrenheit consortium, with the expectation that they will recoup up to 85% of their holdings.

Creditors To Decide Next Steps

Judge Martin Glenn has approved the Celsius disclosure statement, allowing creditors to vote on the proposed restructuring. The bankruptcy plan involves selling assets to the Fahrenheit Group, which would return some crypto deposits to retail customers and give control of business lines, including Bitcoin mining and staking.

Equity Shares and Nasdaq Listing

Fahrenheit plans to buy a minority stake in the new company and list its stock on Nasdaq. This would allow customers to sell equity shares they receive as part of their bankruptcy recovery. The official committee appointed to represent junior creditors has recommended that Celsius customers vote in favor of this plan.

Casting Votes and Recovery Estimate

Creditors will cast their votes on the plan from August 24 to September 22. Celsius estimates that customers with interest-bearing Earn accounts and those who participated in the Celsius Borrow Program will receive up to 85% recovery through the return of liquid crypto assets like Bitcoin and Ethereum.

Chapter 11 Process With Fahrenheit

Celsius has entered an agreement with the Fahrenheit Group to allow them to become a plan sponsor, providing funding and operational expertise. This agreement aims to maximize recovery for stakeholders. Selling all assets to Fahrenheit now may result in a lower recovery, so a new body will be set up to continue certain aspects of the company’s operation.

Hot Take:

The approval of Celsius’s bankruptcy plan and the potential recovery of up to 85% for creditors is a positive development. The involvement of the Fahrenheit consortium and the plan to list the new company’s stock on Nasdaq offer additional opportunities for customers to recoup their losses. It will be interesting to see how the voting process unfolds and the impact it will have on Celsius’s future.