Bankrupt crypto lender Celsius Network pursues new buyer despite existing offer – what’s going on?
Bankrupt cryptocurrency lender Celsius Network is reportedly pursuing multiple bids and exploring new buyers despite having an offer on the table.
During a bankruptcy court hearing in Manhattan, Celsius attorney Chris Koenig said the company remains open to better offers, according to a Reuters report. He added that the lender’s official unsecured creditors’ committee (UCC) met with a potential buyer just days ago to review an alternative proposal.
The crypto lender also asked Judge Martin Glenn, who is overseeing Celsius’ Chapter 11 bankruptcy proceedings, to extend the deadline to file a bankruptcy restructuring plan built around the NovaWulf deal. The judge agreed to give Celsius an extra three weeks.
As reported, in mid-February, NovaWulf Digital Management reached an agreement with Celsius to buy the lending business and help end the bankruptcy case. Debtors of Celsius Network presented the sale plan to the US Bankruptcy Court in the Southern District of New York.
The plan, which proposes an agreement with NovaWulf that would allow the crypto lender to begin returning crypto assets to customers in June, has the support of the firm’s creditors’ committee and is part of the overall reorganization plan for the company’s retail platform and mining operations.
As part of the plan, a “convenience class” of creditors, those with claims less than $5,000 related to Celsius Earn Accounts, will receive a 70% recovery of their funds in the form of a one-time payment in Bitcoin, Ethereum or stablecoin USDC.
On the other hand, Celsius customers who owe more than $5,000 will be allowed to reduce their claim to that amount to join the class, and creditors who owe at least $1,000 can opt out of the class and receive a portion of what yet to be determined. funds recovered for general Earn participants.
If Celsius chooses an alternative bidder, it intends to offer NovaWulf up to $20 million in break-up fees, the report said.
Celsius filed for Chapter 11 bankruptcy last July in an effort to restructure and stabilize the business and maximize value for all stakeholders.
Celsius allocates $25 million for withdrawals
According to the latest developments in the Celsius bankruptcy operations, the crypto lender has established a wallet with $25 million in digital assets for its custodial account holders to withdraw. The funds include $10.39 million in USDC, $8.8 million in ETH, and another $6 million of various digital assets.
By Wednesday, escrow account holders had withdrawn $17.7 million of those cryptocurrencies, Celsius interim CEO Chris Ferraro said in a court hearing, noting that another $3.5 million in withdrawals are pending. That represents 60% of qualified custody users and 80% of crypto value, he said.
Earlier this month, Celsius said it has opened withdrawals to select custody account holders with certain restrictions after securing approval from the US Bankruptcy Court. Celsius was authorized to distribute 94% of each eligible user’s custody holdings, according to a court filing.
