Crypto Lender Celsius is taken over by Novawulf and ends Chapter 11 –
The Committee of Unsecured Creditors of the Crypto Lender Celsius has selected digital asset investment firm Novawulf Digital Management to sponsor the company’s restructuring plan, according to a statement released on Wednesday. The proposed agreement would allow Celsius to exit Chapter 11 bankruptcy proceedings and the new owners could begin distributing funds as early as June, company attorney Ross Kwasteniet said.
According to Celsius, Novawulf deal offers a way forward for Celsius creditors and illiquid assets
Crypto lender Celsius, which filed for bankruptcy in July 2022, has announced that it will be acquired by Novawulf Digital Management. The company was selected from more than 130 offers, and Celsius has described the proposed acquisition as a “value-maximizing deal.”
Also, Celsius’s Committee of Unsecured Creditors tweeted about the deal on Wednesday, stating that the reorganization plan will distribute “liquid cryptos to all account holders.” Alongside this, the committee said the program would create a “litigation trust” while providing creditors with equity in a new company called Newco, which will hold illiquid assets like mining.
Celsius customers with higher balances (more than $5,000) will receive funds from the company’s remaining crypto assets after refunding smaller accounts.
For applicants with low balances (less than $5,000), Newco will create a “convenience class” that consists in the distribution of a specially selected crypto asset such as Bitcoin (BTC) or Ethereum (ETH) will be included. “The proposed Novawulf transaction also lays the groundwork for a possible settlement regarding the debtors’ customer loan portfolios,” said attorneys Ross Kwasteniet and Patrick Nash.
The Committee of Unsecured Creditors noticed that the “final documents of the deal are being finalized”. Additionally, the company plans to hold a Twitter Spaces event soon to announce the acquisition. The committee emphasized that Newco will be a compliant, public reporting company 100% owned by Celsius Earn applicants.
“Its ‘parent’ equity is provided in a tokenized form based on Provenance Blockchain is traded through an SEC-registered broker-dealer and alternative trading facility,” according to the Committee of Unsecured Holders called.
What are your thoughts on Novawulf’s acquisition of Celsius and the potential benefits it could bring to Celsius’ customers and creditors? Do share your thoughts on this topic in the comments section below.
photo credit: Shutterstock, Pixabay, Wiki Commons, Editorial Copyright: mundissima / Shutterstock.com
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Source: Crypto News Deutsch
