Crypto lender Celsius’ unsecured creditors’ committee has chosen digital asset investment firm Novawulf Digital Management as the sponsor of its reorganization plan, the in a statement released Wednesday. The proposed agreement allows Celsius to exit the Chapter 11 process, and the new owners can begin distributing funds as early as June, said Ross Kwastenit, the company’s attorney.
Celsius says the Novawulf deal provides an avenue for Celsius’ creditors and illiquid assets
Cryptolender Celsius, which filed for bankruptcy in July 2022, has announced that it will be acquired by Novawulf Digital Management. The company was selected out of more than 130 bids, and Celsius describes the proposed acquisition as a “value-maximizing conclusion.”
Celsius’ unsecured creditors committee also tweetedabout the deal on Wednesday, saying the reorganization plan “distributes liquid crypto to all account holders.” Alongside this, the committee said the scheme would create a “litigation trust” while offering creditors common stock 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 stash of crypto assets after their smaller accounts are paid out.
For claimants with lower account balances (less than $5,000), Newco will create a “convenience class” that will come with a distribution of specifically chosen crypto assets, such asBitcoin (BTC)orEthereum (ETH).” The proposed Novawulf transaction also lays the groundwork for a potential settlement regarding the debtor’s customer loan portfolio,” explained attorneys Ross Kwasteniet and Patrick Nash.
The Unsecured Creditors Committeesaidthat “final documents are being finalized” for the transaction. Additionally, a Twitter Spaces event will be held in the near future to provide an update on the acquisition. The committee emphasized that Newco will be a public company, compliant with regulations and wholly owned by Celsior Aern’s creditors.
“Its ‘common’ shares will be offered in tokenized form that will be traded on the Provenance blockchain through an SEC-registered broker-dealer and alternative trading system,” the Unsecured Creditors Committee said
What do you think about Novawulf’s acquisition of Celsius and the benefits it could bring to Celsius’ customers and creditors? Share your thoughts on this subject in the comments section below.
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