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Celsius’ bankruptcy plan to distribute around $2 billion worth of Bitcoin and Ether to creditors was approved by a bankruptcy court on November 9.
Creditors will also obtain shares in a reorganized company known as NewCo under the approved plan. The company plans to start reimbursements by the end of the year.
Celsius customers will also get a partial repayment of the crypto assets deposited on the platform. When filing for bankruptcy, Celsius had around 600,000 customers with around $4.4 billion held in interest-bearing accounts.
The bankruptcy restructuring plan also has a settlement valuing Celsius’ CEL token at 25 cents. Earlier this year, the bankrupt crypto lender was accused of inflating the value of CEL to benefit insiders.
Court Approval today, a major milestone for all involved in the Celsius bankruptcy proceedings.
Read more 👉https://t.co/H8dOOMMlxQ pic.twitter.com/tupLd3iAUF
— Arrington Capital (@Arrington_Cap) November 9, 2023
Celsius Reorganizes As NewCo
NewCo will be under the management of Fahrenheit LLC, a consortium of crypto-native individuals and firms like Arrington Capital. The consortium will mine new Bitcoin and monetize Celsius’ illiquid assets.
“Today marks the culmination of a journey that has been far too long and far too expensive for Celsius creditors,” Arrington Capital told Reuters. “We are eager to dig in on our go-forward plan to make things whole for our creditors.”
The consortium will also purchase a $50 million minority stake in the reorganized company, which will list on Nasdaq. Listing will allow Celsius’ customers to sell equity shares obtained as part of the bankruptcy recovery process.
The reorganized NewCo will also pursue charges against Celsius’ founder, Alex Mashinsky. Mashinsky is facing criminal charges in the US and a civil lawsuit in New York.
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