Crypto Lender Celsius to Be Acquired by Novawulf, Exiting Chapter 11
Crypto lender Celsius’ committee of unsecured creditors has selected digital asset investment firm Novawulf Digital Management to sponsor the company’s reorganization plan, according to a statement released on Wednesday. The proposed agreement would allow Celsius to exit the Chapter 11 bankruptcy process, with the new owners able to start distributing funds as early as June, company attorney Ross Kvasteniet said.
Celsius says Novawulf deal will pave the way forward for Celsius creditors and illiquid assets
Cryptocurrency lender Celsius, which filed for bankruptcy in July 2022, announced that it will be acquired by Novawulf Digital Management. The company was selected from over 130 proposals, and Celsius described the proposed acquisition as “a value-maximizing conclusion.”
The Celsius Committee of Unsecured Creditors also tweeted on the deal on Wednesday, saying the reorganization plan would distribute “liquid cryptocurrency to all account holders.” Along with that, the committee said the scheme would create a “judicial trust” as well as provide lenders with shared capital in a new company called “Newco” that would hold illiquid assets such as mining.
Celsius customers with higher account balances (over $5,000) will receive funds from the company’s remaining crypto asset stock after the smaller accounts are reimbursed.
For applicants with a low account balance (less than $5,000), Newco will create a “convenience class” that will be distributed when a specially selected crypto asset is distributed, such as bitcoin (BTC) or ethereum (ETH). “The proposed deal with Novawulf also lays the groundwork for a possible settlement in relation to the debtor’s client loan portfolio,” explained attorneys Ross Kvasteniet and Patrick Nash.
Committee of Unsecured Creditors noticed that “the final documents for the deal are being finalized.” In addition, the company plans to host a Twitter Spaces event soon to provide an update on the acquisition. The committee emphasized that Newco will be a publicly accountable, compliant company that is 100% owned by Celsius Earn applicants.
“His ‘shared’ capital will be provided in tokenized form, which will be traded on the Provenance blockchain through an SEC-registered broker-dealer and an alternative trading system,” the committee of unsecured creditors said. said.
What do you think about Novawulf’s acquisition of Celsius and the potential benefits it could bring to Celsius’ customers and lenders? Share your thoughts on this in the comments section below.
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