Bankrupt crypto lender Celsius chose NovaWulf’s acquisition plan amid a series of bids from high-profile crypto companies.
In a court filing on Wednesday, Celsius debtors announced an in principle agreement with investment firm NovaWulf on a liquidation plan that would bring its Chapter 11 bankruptcy proceedings to a close.
The plan garnered the full support of the Celsius Official Committee of Unsecured Creditors (UCC), an entity that represents the interests of Celsius account holders.
Under the chosen reorganization plan, a new Celsius company will be created and managed by NovaWulf, which will contribute between $45 million and $55 million to the new firm. These terms are expected to curtail the significant costs of liquidating customer assets and winding down Celsius.
Creditors with claims of less than $5,000 related to Celsius Earn Accounts will be eligible to receive 70% of their funds through liquid crypto assets like BTC, ETH and USDC. Those with claims in excess of $5,000 can opt to reduce their claim and join this class of creditors. In the event that they do not go with this option, they will receive the crypto in their accounts after payments to other creditors, and equity in the new company in the form of “Equity Share Tokens.”
The plan also notes that “Insider CEL token claims,” or those that were granted early access to the project’s Initial Coin Offering (ICO) would not receive any proceeds from the recovery process. Meanwhile, non-insider CEL holders would be paid $0.20 – the token’s ICO price.
Celsius said it had contacted more than 130 parties who may have been interested in bidding on its assets before settling on NovaWulf. Last month, Celsius creditor Tiffany Fong leaked five bids from major crypto firms, including Binance, Galaxy Digital and NovaWulf’s own term sheets.
These deals were largely presumed to be dead at the time, with Celsius’ attorney stating in a Jan. 24 hearing that all bids for the firm thus far had been uncompelling in nature.
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- Source: https://unchainedpodcast.com/celsius-agrees-to-novawulf-buyout-plan-to-end-bankruptcy/
