Celsius Network selects NovaWulf bid for bankruptcy exit
By Dietrich Knauth
(Reuters) – The crypto lender Celsius Network will seek to exit bankruptcy led by asset manager NovaWulf Digital Management, which will take over operations of a new company that will be owned by Celsius customers, the company said at a Manhattan court hearing Wednesday.
Celsius selected NovaWulf’s offer from more than 130 proposals received during its bankruptcy proceedings and said NovaWulf was the only finalist intending to retain long-term control of Celsius’ harder-to-liquidate assets, such as its loan portfolio and the Bitcoin mining– Business to keep.
These assets would be owned by Celsius creditors and managed by NovaWulf under a profit-sharing arrangement if Celsius’ proposal is approved by US Bankruptcy Judge Martin Glenn, who is overseeing Celsius’ Chapter 11 proceedings.
Under the plan, Celsius customers with less than $5,000 in their accounts are eligible for a one-time payment in BitcoinEtherium or the stablecoin USDC, according to court documents filed Wednesday. Celsius estimates that this option will be available to more than 85% of its customers, giving them about 70% of the value of their deposits.
Celsius customers with more than $5,000 in their accounts would receive payments from crypto left over after smaller customer accounts were repaid, in addition to receiving ownership interest in the new company.
NovaWulf has agreed to pay up to $55 million to the reorganized company, which will be owned by Celsius creditors and will continue Celsius’ bitcoin mining and lending business. According to court documents, NovaWulf will share in the profits of the new company.
Celsius was looking at the restructuring proposal when its exclusive right to file a Chapter 11 plan was about to expire. Several creditor groups had opposed Celsius’ request for more time to file a bankruptcy plan, but Celsius said the court-appointed committee representing its customers approved the NovaWulf deal.
New Jersey-based Celsius filed for US bankruptcy in July after freezing customer withdrawals. Celsius said at the time it had more than 1.7 million registered users and approximately 300,000 active users with balances in excess of $100.
(Reporting by Dietrich Knauth in New York; Editing by Alexia Garamfalvi and Matthew Lewis)
Source: Crypto News Deutsch