Feb 16, 2023
Celsius Selects NovaWulf to Distribute Crypto to Creditors
Celsius Network, a crypto lender that recently declared bankruptcy, has chosen NovaWulf Digital Management to sponsor its Chapter 11 restructuring plan. The plan, which was presented to the United States Bankruptcy Court for the Southern District of New York on Feb. 15, is supported by the Celsius Official Committee of Unsecured Creditors (UCC). It is expected that most customers will recover up to 70% of their funds through the new plan.
The plan will involve the creation of a new public platform, called NewCo, that is fully owned by Earn creditors. The UCC will appoint a majority of the company’s board members, and NovaWulf will make a direct cash contribution of between $45 million to $55 million to the new firm.
NewCo will house Celsius’ illiquid assets, mining business, and existing loan portfolio. It will also be responsible for developing crypto-oriented services in the future.
Creditors with claims valued $5,000 and below on the petition date will be placed in a “Convenience Class.” They will receive a one-time distribution of liquid crypto paid in the form of Bitcoin (BTC), Ether (ETH), and USD Coin (USDC). It is estimated that this option will provide over 85% of Celsius customers with around a 70% recovery of their deposited crypto.
Creditors with a claim over $5,000, or those with a claim of over $1,000 who opt out of the Convenience Class shares, will receive a payment of the residual crypto after the payments to smaller accounts. They will also receive ownership in NewCo through equity and management share tokens, which will pay dividends to holders.
Insider CEL token claims, or those buyers granted early ICO access, will receive no recovery. The plan also calls for the creation of a “well-funded litigation trust” to pursue lawsuits against Celsius executives and former CEO Alex Mashinsky.
Six firms, including Binance, Bank To The Future, Cumberland DRW, and Galaxy Digital, placed bids on Celsius crypto assets. The company filed for Chapter 11 bankruptcy in July 2022, after halting withdrawals citing “extreme market conditions” and rumors of insolvency.
The proposed plan will need approval from U.S. Bankruptcy Judge Martin Glenn before it can be enacted. It is hoped that the restructuring plan will provide the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers.
The new company will be a great opportunity for those interested in the web3 space and NFT marketing. It could be an ideal platform for crypto and NFT promotion, and a great way to get involved in NFT marketing. NovaWulf Digital Management could be the perfect web3 agency to help you sell NFTs and promote your crypto and NFTs on Twitter and other social media platforms.Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.