Celsius Bankruptcy Plan Receives Creditors' Backing; New Company and Refunds Proposed
Summary:
Creditors involved in the Celsius bankruptcy case have backed a plan to refund their money and distribute shares through a newly formed company, "NewCo". This scheme, which still requires final confirmation, involves the redistribution of approximately $2 billion in Bitcoin (BTC) and Ether (ETH). The new company, managed by the Fahrenheit Group, aims to expand Bitcoin mining operations, stake Ethereum, and explore new business opportunities. The results come after Celsius Network collapsed amidst the 2022 bear market and faced allegations of unregistered and fraudulent offers.
In the ongoing bankruptcy proceedings of Celsius, creditors have given their approval to a proposal that promises to refund their money and distribute shares via a newly established company. As reported on September 25 by Stretto, the bankruptcy agency handling the case, a staggering 98% majority of the involved creditors have pledged their support for the plan. The voting revealed enthusiastic support for the plan, with over 95% approval from all eligible stakeholders, symbolizing our successful collaborative efforts throughout the Chapter 11 proceedings.
Nevertheless, this near-universal assent to the proposal is still pending a definitive approval at a confirmation hearing in the US Bankruptcy Court for the Southern District of New York, scheduled for October 2nd. As per a disclosure made public on August 17, the proposed scheme involves the redistribution of approximately $2 billion in Bitcoin (BTC) and Ether (ETH) to creditors of the Celsius Network. In addition, the plan stipulates the distribution of stock in a fledgling company, provisionally named "NewCo."
NewCo is set to manage and expand the existing Bitcoin mining operations of the debtors, stake Ethereum, liquidate its otherwise non-preferable assets, and explore novel, value-enhancing, and fully regulated business opportunities. The enterprise will be under the leadership of the Fahrenheit Group. This consortium comprises of crypto specialists and organizations, including the ex-CEO of Algorand, Steven Kokinos, venture capitalist firm Arrington Capital, US Bitcoin Corp, Proof Group Capital Management, and Ravi Kaza, an advisor to Arrington Capital.
Celsius Network was among the initial major casualties of the 2022 bear market; the crypto lending platform filed for bankruptcy on July 14, 2022. On July 13, 2023, the Securities and Exchange Commission fired a lawsuit against Celsius and its erstwhile CEO, Alex Mashinsky, alleging them of illegally amassing billions via deceitful offers comprising "crypto asset securities". The former CEO was arrested on the same day following an indictment from the U.S. Department of Justice, who charged him with fraudulent financial activity, duping the investors, among other similar offenses.
Published At
9/26/2023 12:14:11 AM
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