Celsius Continues Chapter 11 Restructuring Plans, Claims Will Be Disclosed

Key Points:

• Celsius announced it will continue with their plan to restructure their bankrupt company under chapter 11.
• On April 12 they will file a disclosure statement that will provide a summary of the restructuring plan containing information to claim holders.
• proposes to create a public platform wholly owned by Earn creditors called NewCo with funding from NovaWulf.

Cryptocurrency lender Celsius Network has announced that it will continue its Chapter 11 restructuring plan and issue a submission on April 12.

In a notice to users on April 7, the company revealed that it would file a disclosure statement on April 12 containing information for claim holders. This statement is intended to provide “adequate information” to holders requesting a vote on the proposed restructuring plan funded by NovaWulf.

The disclosure will provide a summary of the restructuring plan, the percentage of account holders’ funds recovered, answers to frequently asked questions, and information on certain risk factors.

Celsius first presented its plan in February, proposing creating a public platform wholly owned by Earn creditors, NewCo. NewCo will be a publicly-reported, regulatory-compliant company 100% owned by Earn’s creditors, all of whom will receive a substantial distribution of liquid crypto with a “convenience layer.” “convenience” includes creditors receiving 70% of the recovery. No Celsius founders will join NewCo, and the majority of the NewCo board will be appointed by unsecured creditors (UCCs).

Previously, the Debtor chose NovaWulf because it provides the best method to distribute the Debtor’s liquid crypto assets and maximize the value of the Debtor’s illiquid assets through a new company created by the Debtor’s experienced property managers.

The plan sets aside $50 million for NewCo’s mining operations, among other mining-related specifics. The plan is a product of the Debtor’s court-approved sales process that Celsius Network’s lawyers outlined in January 2023. They have said the bankrupt crypto lender plans to reinvent itself as a new, publicly traded “recovery corporation” to exit bankruptcy proceedings.

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