The committee of unsecured creditors of crypto lender Celsius has chosen digital asset investment firm Novawulf Digital Management to sponsor the company’s reorganization plan, according to a statement published on Wednesday. The proposed deal would allow Celsius to exit Chapter 11 bankruptcy proceedings, and the new owners could begin distributing the funds as early as June, company attorney Ross Kwasteniet said.
Celsius says Novawulf deal will provide a path forward for Celsius creditors and illiquid assets
Crypto lender Celsius, which filed for bankruptcy in July 2022, has Announced which will be acquired by Novawulf Digital Management. The company was selected from more than 130 bids, with Celsius describing the proposed acquisition as a “value-maximizing conclusion.”
The Celsius committee of unsecured creditors also tweeted about the deal on Wednesday, stating that the reorganization plan will distribute “liquid cryptocurrencies to all account holders.” In addition to this, the committee said the scheme would create a “dispute trust” while also providing creditors with common equity in a new company called “Newco” that will hold illiquid assets such as mining.
Celsius clients who have higher account balances (more than $5,000) will receive funds from the company’s remaining stash of crypto assets after smaller accounts have been redeemed.
For claimants with low account balances (less than $5,000), Newco will create a “Convenience Class”, which will come in the distribution of a specifically chosen crypto asset, such as Bitcoin (BTC) either Ethereum (ETH). “The proposed Novawulf transaction also lays the groundwork for a potential settlement with respect to the debtors’ client loan portfolio,” attorneys Ross Kwasteniet and Patrick Nash explained.
The committee of unsecured creditors commented that the “final agreement documents are being finalized”. In addition, the company plans to hold a Twitter Spaces event soon to provide updates on the acquisition. The committee emphasized that Newco will be a publicly reporting and compliant company and will be 100% owned by the Celsius Earn claimants.
“Your ‘common’ capital will be provided in the form of a token that will be traded on the Provenance Blockchain through an SEC-registered broker-dealer and alternative trading system,” the unsecured creditors committee said. saying.
What do you think about Novawulf’s acquisition of Celsius and the potential benefits it can bring to Celsius’ customers and creditors? Share your thoughts on this topic in the comments section below.
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