Celsius Network gains court approval for its bankruptcy recovery plan, including asset sale to Fahrenheit consortium. The proposed Chapter 11 Plan envisions NewCo’s launch with board oversight from the Creditors Committee.
Account holders will vote until September 22, aiming for a Court hearing on October 2, and a brighter future for Celsius and creditors.
In the official press release, the plan offers hope for creditors to retrieve a substantial portion of their holdings, estimated between 67% and 85%.
Legal Approval Fuels Celsius’ Revival
The court’s approval represents a turning point for Celsius, as the company navigates a challenging landscape characterized by crypto market volatility and the legal woes of its former CEO, Alex Mashinsky.
Mashinsky faces allegations of fraud, which he boldly denies. Chris Ferraro, who has taken the reins as interim CEO, emphasized the company’s firm commitment to prioritizing the interests of its customers and creditors.
Operating under Chapter 11, the process is being overseen by New York Bankruptcy Judge Martin Glenn, underscoring the dedication to expediting the restitution of value.
Celsius Creditors to Decide on Asset Sale Plan
Central to Celsius’ revival plan is the proposed sale of its assets to a consortium led by Arrington Capital and crypto miner U.S. Bitcoin Corp. People who gave Celsius money will vote on this plan.
They can say yes or no between August 24 and September 22. If most of them agree, people could get back some of their money.
According to the sources, Earn Account Holders get back 67% of what they put in, while others participating in Celsius’ Borrow Program might get back 85.6%. This is better than just selling everything quickly, which might only give back 47%.
Past examples in the crypto bankruptcy sphere have witnessed creditors overwhelmingly endorsing restructuring plans. Notably, crypto lender Voyager experienced a resounding 97% approval rate for its proposed sale to Binance.US. However, unexpected legal delays led to the dissolution of the deal.
What’s Next: Mashinsky’s Arrest and Company Stand
The arrest of former CEO Alex Mashinsky in July, on charges encompassing securities fraud, commodities fraud, wire fraud, and market manipulation, initially cast shadows over Celsius’ prospects.
While the company itself escaped prosecution due to cooperation and acceptance of responsibility, a substantial $4.7 billion fine imposed by the Federal Trade Commission has not diverted Celsius from its commitment to returning funds to customers.