The Celsius bankruptcy plan has received the nod of approval, marking the conclusion of a complex case. This creditor-endorsed plan is set to facilitate partial reimbursements for Celsius customers and transform them into shareholders in the restructured entity known as NewCo.
Judge Martin Glenn, presiding over the Southern District of New York Bankruptcy Court, officially confirmed the approval of the bankruptcy plan on November 9. The decisive endorsement came after Celsius creditors overwhelmingly voted in favor of the plan on September 27. This green light signals a significant step forward, providing a clear path for the redistribution of approximately $2 billion in Bitcoin and Ether to Celsius creditors. In addition to these partial reimbursements, creditors will also acquire equity in NewCo. The company has expressed its intention to initiate the reimbursement process by the year’s end.
![Celsius exits bankruptcy, creditors to receive $2B in crypto image 52](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/11/image-52.png?resize=886%2C827&ssl=1)
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The unique nature of Celsius’s bankruptcy case involves many of its creditors participating in the Earn program. This initiative allowed them to earn weekly rewards by holding CEL tokens, which were subject to a one-year lock-up period. Notably, Judge Glenn’s decision emphasized that the Confirmation Order or the Plan does not constitute a finding regarding whether CEL Token or the Earn Program qualifies as securities under any securities laws.
The establishment of NewCo, the reorganized company resulting from the bankruptcy plan, holds strategic significance. NewCo is slated to expand the existing mining operations inherited from the previous crypto lender, Celsius. Beyond mining, the company is positioned to monetize illiquid Celsius assets and engage in other developmental activities, contingent upon regulatory approval.
Crucially, NewCo will be overseen by the Fahrenheit consortium, comprising various crypto-native individuals and organizations. Among the consortium members is Proof Group, a notable entity reportedly vying for FTX. This consortium-based management approach underscores a collaborative effort to steer NewCo toward success and sustainability in the evolving crypto landscape.
![Celsius exits bankruptcy, creditors to receive $2B in crypto image 53](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/11/image-53.png?resize=1024%2C857&ssl=1)
![Celsius exits bankruptcy, creditors to receive $2B in crypto image 53](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/11/image-53.png?resize=1024%2C857&ssl=1)
The backdrop of Celsius’s bankruptcy, declared in July 2022, is further complicated by legal entanglements involving its former CEO, Alex Mashinsky.
In a subsequent development, Mashinsky was arrested in July 2023 on charges of securities fraud, commodities fraud, and wire fraud. With a trial date set for September 2024, Mashinsky remains free on $40 million bail. Another key figure in this narrative is Roni Cohen-Pavon, the former Celsius chief revenue officer, who has pleaded guilty to fraud and price manipulation charges. Cohen-Pavon’s sentencing is scheduled for December 11, adding another layer of complexity to the aftermath of Celsius’s bankruptcy.
As the Celsius saga continues to unfold, the approval of the bankruptcy plan brings a measure of resolution for creditors while paving the way for the emergence of NewCo. The intricate interplay of legal proceedings, financial restructuring, and the formation of a reinvigorated entity underscores the multifaceted nature of the crypto industry, where challenges are met with innovative solutions and collaborative approaches.
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