Debtors of the bankrupt crypto lender, Celsius Network represented a sale plan to the U.S. Bankruptcy Court of the Southern District of New York. The plan outlines the company’s plan to compensate the affected creditors by choosing NovaWulf as the winner of the sponsorship.
The plan provides reorganization measures for Celsius’s retail platform and mining business. The plan carries the official support of the official committee of unsecured creditors (UCC).
According to the document, Celsius creditors holding lower than $5000 in their lending accounts would be compensated with the majority of their funds. The rest of the creditors will get tokenized shares in the new company, which will be tradable on Provenance Blockchain through a registered broker-dealer.
The filing revealed the reason behind choosing NovaWulf as it “provides the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers,”
The plan is coming after the Debtors’ sales process was approved by the court, proposed by Celsius’ lawyers in January 2023. At that time, the firm stated that they are aiming to reinvent itself as a new, publicly traded “recovery corporation” by closing the bankruptcy process.
As a part of the sale process, the Debtors’ advisors are contacting over 130 parties. Also, it involves the execution of non-disclosure agreements with 40 potential bidders. However, the number was shrunk to six bids for the retail platform, and three bids for the mining operation at the end of the process.
According to the flow of the process, in the next step, the binding agreement will be finalized to declare NovaWulf as the successful bidder. The plan asks for an inside cash flow of $45 million -$55 million to develop NewCo (temporary name), a regulatory-compliant public reporting company fully owned by Earn creditors.
No Celsius founder will be involved in NewCo and the majority of the NewCo board will be appointed by the UCC. The plan specifically reserves $50 million for NewCo’s mining operations.
