• Celsius Network has chosen NovaWulf Digital Management to sponsor its proposed Chapter 11 restructuring plan.
• Most creditors will receive a one-time payment of crypto, while those with larger claims will get equity in a new company.
• NovaWulf will also make a direct cash contribution of between $45 million to $55 million to the new firm.
Celsius Network Files for Bankruptcy
Celsius Network recently filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York. As part of their restructuring plan, Celsius chose NovaWulf Digital Management as the sponsor for its proposed Chapter 11 restructuring plan.
Payment Plan for Creditors
Under this proposal, most creditors would receive a one-time payment of crypto, while those with larger claims would get equity in a new company. In addition, NovaWulf will make a direct cash contribution of between $45 million and $55 million to the new firm.
New Company Formed
The plan calls for the creation of a new public platform fully owned by Earn creditors called NewCo, with the UCC appointing the majority of the company’s board members. The board will have no “Celsius founder involvement or relationship.”
The proposed plan has also received support from Celsius’ Official Committee of Unsecured Creditors (UCC), which represents all account holders affected by this filing.
Maximizing Value with Experienced Asset Managers
According to Celsius’ filing, they believe that “the NovaWulf plan provides the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers.”