During a court hearing, the insolvent crypto lender Celsius said that it plans to start repaying its customers by the end of 2023.
During an October 2 hearing, cryptocurrency lender Celsius told a judge it plans to start paying its customers by the end of the year.
Celsius Aims to Start Repayments by End 2023
During its October 2 bankruptcy hearing, Christopher Koenig, legal counsel for insolvent crypto lender Celsius, told a judge that the firm is seeking court approval to start making payments to its customers by the end of 2023.
#Celsius will distribute at least $2.03B of crypto to Creditors.Meanwhile, NewCo will be seeded with up to $450 million in crypto.
— Celsius NewCo Community (@CelsiusNewCo) October 2, 2023
Celsius creditors recently voted in favour of the firm’s reorganization plan, which could see them recover between 67% and 85% of their holdings. A critical element of Celsius’s restructuring plan is a new company called NewCo. According to a filing, NewCo has $450 million in seed funding focused on Bitcoin mining and staking. In the filing presented at the confirmation hearing, Celsius’ restructuring plan has the support of over 95% of its creditors:
“The Debtors arrive at Confirmation with a Plan that has the support of over 95% of voting Account Holders by both number and dollar amount.”
The newly established firm will be owned by Celsius’ customers but managed by crypto consortium Fahrenheit. Fahrenheit won the bid to acquire Celsius in May.
In the filing presented to the court, Celsius explains:
“Fahrenheit has committed to inject up to $50 million as an equity stake in NewCo, and Fahrenheit’s management team will be compensated in NewCo Common Stock to best align the interests of Fahrenheit and creditors who will own NewCo.”
Restructuring Includes Distribution of $2B in BTC and ETH
The bankrupt crypto lender first outlined its proposed restructuring arrangement in August after being granted permission to send the plan to its creditors. The proposal includes the distribution of over $2 billion worth of Bitcoin and Ether among its creditors.
To further “maximize liquidity,” NewCo plans to list on the Nasdaq stock exchange and will award Celsius’ creditors with equity in the company.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
