Creditors Overwhelmingly Approve Celsius Bankruptcy Reorganization Plan
Crypto News – Creditors of Celsius, the cryptocurrency lending platform now facing bankruptcy, have cast their votes in favor of a reorganization plan, showing strong support with over 98% approval across most classes involved in the bankruptcy claim. The plan proposes a significant return of 67% to 85% of their holdings.
The vote, outlined in a declaration filed by restructuring specialist Stretto, awaits final approval from the court. However, some objections, notably from the U.S. Trustee, have been raised concerning the proposed plan. The U.S. Bankruptcy Court for the Southern District of New York is scheduled to conduct a confirmation hearing for the final approval of the plan on October 2. The presiding judge had previously approved the voting procedure in August 2023.
This reorganization plan not only secures creditor support but also outlines the sale of assets to the cryptocurrency consortium Fahrenheit Holdings, featuring key players such as Arrington Capital and U.S. Bitcoin Corp. Fahrenheit successfully bid for the acquisition of the financially troubled Celsius Network back in May 2023.
The overwhelmingly positive vote represents a significant milestone toward concluding Celsius’ bankruptcy proceedings and initiating the process of returning funds to its customers. The bankruptcy filing took place in July of the preceding year, coinciding with the onset of the cryptocurrency market downturn. Furthermore, the former Chief Executive Officer of Celsius, Alex Mashinsky, resigned from his position in September 2022. Subsequently, in July 2023, Mashinsky faced arrest on charges of fraud and market manipulation related to the CEL token, charges he vehemently denied.
In the midst of these legal challenges, Celsius managed to negotiate a substantial $4.7 billion settlement with the U.S. authorities concerning the fraud allegations. Notably, this settlement is anticipated to have no adverse effects on the ongoing reorganization plans. Mashinsky was later released on a $40 million bond, while a recent court order resulted in the freezing of his banking and real estate assets.
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