Crypto Lender Celsius to Be Acquired by Novawulf, Exiting Chapter 11
Crypto lender Celsius’ committee of unsecured creditors has chosen the digital asset investment firm Novawulf Digital Management to sponsor the company’s reorganization plan, according to a statement published on Wednesday. The proposed agreement would enable Celsius to exit the Chapter 11 bankruptcy process, and the new owners could begin distributing funds as early as June, said the company’s attorney Ross Kwasteniet. Celsius Says Novawulf Deal to Provide Path Forward for Celsius Creditors and Illiquid Assets
Crypto lender 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 has described the proposed acquisition as a “value-maximizing conclusion.”
Celsius’ committee of unsecured creditors also tweeted about the deal on Wednesday, stating that the reorganization plan will distribute “liquid crypto to all account holders.” Alongside this, the committee said the scheme would create a “litigation trust” while also providing creditors with common equity in a new company called “Newco” that will hold illiquid assets such as mining.
Customers of Celsius who have higher account balances (more than $5,000) will receive funds from the company’s remaining stash of crypto assets after smaller accounts have been reimbursed.
For claimants with low account balances (less than $5,000), Newco will create a “Convenience Class,” which will come in the distribution of a specifically chosen crypto asset, such as bitcoin (BTC) or ethereum (ETH). “The proposed Novawulf transaction also lays the groundwork for a potential settlement regarding the debtors’ customer loan portfolio,” attorneys Ross Kwasteniet and Patrick Nash explained.
The committee of unsecured creditors remarked that the deal’s “definitive documents are being finalized.” Additionally, the company plans to hold a Twitter Spaces event soon to provide updates on the acquisition. The committee emphasized that Newco will be a regulatory-compliant, publicly reporting company that is 100% owned by Celsius Earn claimants.
“Its ‘common’ equity will be provided in a tokenized form that will trade on the Provenance Blockchain through an SEC-registered broker-dealer and alternative trading system,” the unsecured creditors’ committee said. Tags in this story account balances, account holders, Acquisition, alternative trading system, Bankruptcy, Bitcoin, broker-dealer, Celsius, Celsius bankruptcy, Celsius Novawulf, Chapter 11 ends, common equity, Convenience Class, crypto assets, Crypto lender, customer loan portfolio, Ethereum, illiquid assets, liquid crypto, litigation trust, mining, Novawulf, Novawulf acquisition, Novawulf Digital Management, Patrick Nash, potential settlement, Provenance Blockchain, regulatory compliant, reorganization plan, Ross Kwasteniet, SEC-registered, unsecured creditors
What are your thoughts on the acquisition of Celsius by Novawulf and the potential benefits it may provide for Celsius customers and creditors? Share your thoughts about this subject in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. Stanford Alumni Revealed as Co-Signers of FTX Co-Founder"s $250M Bond NEWS | 5 hours ago FTX Bankruptcy Judge Denies US Trustee"s Request for Independent Examiner NEWS | 1 day ago
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