Creditors Approve Plan for Celsius Bankruptcy Case
Creditors involved in the Celsius bankruptcy case have voted in favor of a comprehensive plan that will allow for the return of funds and the fair distribution of assets through the creation of a new entity. According to a recent filing by bankruptcy firm Stretto, the majority of creditor classes have shown overwhelming support for the proposal, with approval rates exceeding 98 percent.
Final Approval Pending Court Decision
The plan still requires the final approval from the United States Bankruptcy Court for the Southern District of New York. A confirmation hearing is scheduled for October 2nd to determine the fate of the plan. This hearing marks a crucial moment in this complex legal process.
Restitution and New Entity
If approved, the current blueprint will involve reimbursing approximately $2 billion worth of Bitcoin and Ethereum to Celsius Network’s creditors. Additionally, it outlines the establishment of a new enterprise referred to as “NewCo.” This new entity will not only manage and expand upon the Debtors’ Bitcoin mining operations but also engage in Ethereum staking, explore less liquid assets, and pursue innovative and compliant business ventures.
Management by Fahrenheit Group
Fahrenheit Group, a consortium composed of notable figures and organizations in the crypto industry, will oversee the management of NewCo. Their expertise will guide the future endeavors of this fresh entity.
Celsius Network’s Troubles and Founder’s Charges
Celsius Network, once a prominent player in crypto lending, faced significant challenges during the 2022 bear market. The company filed for bankruptcy on July 14, 2022, shocking the crypto community. Prior to that, on July 13, 2023, Celsius and its former CEO Alex Mashinsky were sued by the Securities and Exchange Commission (SEC) for alleged fraudulent and unregistered sales of “crypto asset securities.” Mashinsky was arrested on the same day, facing charges related to financial fraud and misleading investors.
Hot Take: Creditors Approve Plan, Awaiting Court Decision
The creditors in the Celsius bankruptcy case have overwhelmingly approved a comprehensive plan that aims to return funds and distribute assets fairly. While creditor consensus is strong, the plan still requires final approval from the court. If accepted, approximately $2 billion worth of Bitcoin and Ethereum will be restituted to creditors, and a new entity called NewCo will be established to manage various crypto operations and explore innovative ventures. The management of NewCo will be overseen by Fahrenheit Group, a consortium of experts in the crypto industry. This development comes after Celsius Network’s tumultuous journey and its founder’s legal troubles. The confirmation hearing on October 2nd will determine the plan’s fate.
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