Celsius Escapes Bankruptcy: Court Approves Restructuring Plan
- The New York Bankruptcy Court has approved Celsius’ restructuring plan.
- Celsius proposes to reorganize the firm into a BTC mining platform and initiate a reimbursement plan for creditors.
- The new firm will be rebranded as ‘NewCo’ and will be managed by the consortium Fahrenheit.
According to recent reports, the New York Bankruptcy Court has approved the bankrupt cryptocurrency firm Celsius’ restructuring plan. After which, customers could recover their funds and receive equity in the new company, a creditor-owned Bitcoin mining company.
In a court order dated November 9, Judge Martin Glenn of the Southern District of New York Bankruptcy Court approved the Celsius creditors’ proposal to restructure Celsius, which would be rebranded to NewCo. Under the proposed plan, the new platform will focus on BTC mining and staking fee earnings. The consortium Fahrenheit LLC will manage the new platform and is expected to acquire a minority stake in NewCo for around $50 million. Fahrenheit will also list the BTC mining company’s stock on Nasdaq.
In July 2022, Celsius filed for Chapter 11 bankruptcy, allegedly affected by the severe crypto winter. The move followed Celsius’ suspension of withdrawals, citing “extreme” market conditions. The platform disclosed its liabilities, ranging from $1 billion to $10 billion.
The court has approved Celsius’ restructuring proposal, but the platform still awaits confirmation from the Securities and Exchange Commission (SEC). While Celsius is still under the scrutiny of the SEC, Judge Glenn urged it to respond immediately to the platform’s request regarding the restructuring plan.
Michael Arrington, the founder of Arrington Capital, commented on Celsius’s restructuring, claiming that it is a unique rebirth compared to other platforms that have fallen victim to the bear market. He stated:
Today marks the culmination of a journey that has been far too long and far too expensive for Celsius creditors. We are eager to dig in on our go-forward plan to make things whole for our creditors.
Celsius plans to initiate the reimbursement plan by the end of 2024, when it will begin distributing creditors’ funds. Under the restructuring plan, $2 billion worth of Bitcoin and Ether will be distributed to creditors.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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