After declaring Chapter 11 bankruptcy in July 2023, Celsius Network has been exploring all possibilities to raise the value of its holdings and restructure its operation. In order to emerge from bankruptcy, the bitcoin lender today disclosed that it had reached an agreement to collaborate with NovaWulf Digital Management.
Celsius Network’s New Choice to Survive Bankruptcy
At a court hearing in Manhattan on Wednesday, Celsius Network announced that it would partner with NovaWulf Digital Management to emerge from bankruptcy. NovaWulf would oversee the operations of a new business that would be owned by Celsius clients.
Out of more than 130 bids submitted, Celsius chose NovaWulf’s offer. The company claimed that NovaWulf was the only option that promised to retain long-term control over Celsius’ harder-to-liquidate assets, such as its loan portfolio and bitcoin mining operation.
About Agreement
The sale and restructuring plan was offered by Celsius’ debtors. Also, it received the complete support of the official committee of unsecured creditors for the business. Creditors and U.S. Bankruptcy Judge Martin Glenn, who is overseeing Celsius’ Chapter 11 process, have approved the proposal.
The court filing states that NovaWulf would oversee the operations of the newly formed company known as “NewCo.” Furthermore, under a profit-sharing arrangement, NovaWulf would handle those assets on behalf of Celsius’s creditors.
A majority of users anticipate recovering up to 70% of their funds. Moreover, NovaWulf committed to giving the new company between $45 million and $55 million in direct cash.
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