Crypto lender Celsius’ committee of unsecured creditors has chosen digital investment firm Novawulf Digital Management to sponsor the company’s reorganization plan, according to a statement published on Wednesday. The proposed deal would allow Celsius to exit the Chapter 11 bankruptcy process and the new owners could begin distributing funds as early as June, company attorney Ross Kwasteniet said.
Celsius says the Novawulf deal will provide 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 bids, and Celsius has described the proposed acquisition as a “value-maximizing conclusion.”
Celsius’ committee of unsecured creditors as well tweeted about the deal on Wednesday, saying the reorganization plan will distribute “liquid crypto to all account holders.” Alongside this, the committee said the scheme would create a “legal trust” while giving creditors joint equity in a new company called “Newco” which would have illiquid assets such as mining.
Customers of Celsius who have higher account balances (more than $5,000) will receive funds from the company’s remaining holdings of cryptoassets after smaller accounts have been refunded.
For claimants with low account balances (less than $5,000), Newco will create a “Convenience Class”, which will come in the distribution of a specifically chosen crypto-asset, such as bitcoin (BTC) or ethereum (ETH). “The proposed Novawulf transaction also sets the stage for a potential settlement regarding the debtor’s customer loan portfolio,” explained attorneys Ross Kwasteniet and Patrick Nash.
The selection of unsecured creditors noted that the agreement’s “definitive documents are being finalised.” In addition, the company plans to hold a Twitter Spaces event soon to provide updates on the acquisition. The Committee emphasized that Newco will be a regulatory-compliant, publicly reporting company that is 100% owned by Celsius Earn claimants.
“The ‘trapped’ equity will be provided in a tokenized form that will trade on the Provenance Blockchain through an SEC-registered broker-dealer and an alternative trading system,” the unsecured creditors’ committee so.
Tags in this story
account balance, account holders, Acquisition, alternative trading system, Bankruptcy, Bitcoin, broker-dealer, Celsius, Celsius bankruptcy, Celsius Novawulf, Chapter 11 closes, common equity, Convenience Class, crypto assets, Crypto lender, customer loan portfolio, Ethereum, illiquid assets, liquid crypto , litigation trust , mining , Novawulf , Novawulf acquisition , Novawulf Digital Management , Patrick Nash , potential settlement , Provenance Blockchain , regulatory compliance , reorganization plan , Ross Kwasteniet , SEC-registered , unsecured creditors
What are your thoughts on the acquisition of Celsius by Novawulf and the potential benefits it could bring to Celsius customers and creditors? Share your thoughts on this topic in the comments section below.
Jamie Redman
Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image credit: Shutterstock, Pixabay, Wiki Commons, Editorial image credit: mundissima / Shutterstock.com
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is directly or indirectly responsible for damages or losses caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
