Crypto lender Celsius sends bankruptcy plan to creditor vote
NEW YORK: Crypto lender Celsius Network on Monday (Aug 14) received a US bankruptcy judge's permission to seek creditor approval for its bankruptcy plan, advancing a proposal to exit Chapter 11 as a new entity owned by its creditors.Judge Martin Glenn signed off on Celsius's disclosure statement and solicitation materials at a US Bankruptcy Court hearing in Manhattan, saying Celsius had given creditors sufficient information to vote on the proposed restructuring.Some creditors oppose the plan, but the official committee appointed to represent junior creditors supports it and will recommend that Celsius customers vote in favor.New Jersey-based Celsius filed for Chapter 11 protection in July 2022, one of several crypto lenders to go bankrupt following the rapid growth of the industry during the COVID-19 pandemic.
Celsius had 600,000 customers who held about US$4.4 billion in interest-bearing Celsius accounts when it filed for bankruptcy, according to court documents.Celsius's bankruptcy plan would return some crypto deposits to retail customers and hand control of remaining business lines - including bitcoin mining and staking - to the Fahrenheit Group, a consortium that includes blockchain-based venture capital firm Arrington Capital.Celsius estimates that most of its customers, who had interest-bearing Earn accounts, will receive a 67 per cent recovery, through return of liquid crypto assets like Bitcoin and Ether, equity shares in the new company, and proceeds of post-bankruptcy litigation against company founder Alex Mashinsky and others.
Customers will generally receive a higher recovery on other, non-interest-bearing accounts.Fahrenheit will buy a minority stake in the new business for US$50 million and will publicly
