Celsius’ debtors have released a sale plan that outlines their strategy to compensate the bankrupt crypto lender’s clients.
According to the presentation, the proposed sale plan will be sponsored by investment firm NovaWulf Digital Management. The plan has received support from Celsius’ Committee of Unsecured Creditors (UCC).
The sale plan will allow Earn Creditors with claims valued below $5,000 to be placed in a “Convenience Class.” These clients will be able to recover 70% of their assets in Bitcoin (BTC), Ethereum (ETH), or USD Coin (USDC).
Meanwhile, the General Creditors will receive liquid tokens and tokenized shares in “NewCo,” or the company meant to replace Celsius.
The document claimed that NewCo's common equity will be owned only by Celsius’ creditors. A majority of the firm’s board will consist of members appointed by the UCC.
The plan’s sponsor, NovaWulf, will make a direct cash contribution ranging between $45M and $55M to NewCo. NovaWulf will also provide additional contributions to NewCo’s customers to offset gas fees.
The debtors expect NewCo to become one of the largest direct staking platforms. They added that none of Celsius’ founders will be a part of NewCo.
“NewCo will house Celsius’ illiquid assets and mining business, and will develop crypto-oriented operating businesses and services for the benefit of EST holders.”
The document also said insider claims on CEL tokens will not support recoveries. The non-insider CEL Earn claims will be valued at $0.20.
The reorganization plan will reserve $50M to aid the growth of NewCo’s mining ventures.
So far, the sale process has yielded six bids for Celsius' retail platform and three bids for its mining platform.
The debtors intend to release the Detailed Plan Term Sheet by the end of February. The court hearing to approve the Disclosure Statement is slated for April 30, while the confirmation hearing is scheduled for early June.
Written by
Ayush Pande
Ayush Pande is a hardware, gaming, and crypto writer based in India. He's a tech enthusiast who's fascinated by the potential of blockchain technology.
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