Celsius Network to File Disclosure Statement for Restructuring Plan

Bankrupt crypto lender Celsius Network has announced it will be moving forward on its Chapter 11 restructuring plan with a disclosure statement containing information for claim holders. The statement is set to be filed on April 12, providing adequate information for claim holders to vote on the proposed restructuring plan sponsored by NovaWulf.

Celsius first presented the plan in February, which proposed creating a public platform fully owned by Earn creditors called NewCo. The committee of unsecured creditors will appoint the majority of the firm’s board members, with no Celsius founder involvement or relationship. The goal of this plan is to ensure a fair restructuring process that prioritizes the interests of creditors and other stakeholders.

The debtors’ statement regarding the plan reveals that the April 12 filing will include details of events leading up to Celsius’ bankruptcy, projected recoveries for certain stakeholders should the restructuring plan be approved, and answers to frequently asked questions. The bankruptcy court is expected to conduct a hearing regarding approval of the disclosure statement on May 17, with a vote on the plan to follow.

Since filing for Chapter 11 in July 2022, Celsius’ bankruptcy proceedings in court have included discussions on assets from the firm’s Earn program, crypto holdings, Bitmain coupons, and personal information of its users. In March, the bankruptcy judge approved a settlement plan allowing Celsius custody account holders to get back 72.5% of their crypto.

Celsius Network is a crypto lending platform that enables users to earn interest on their crypto assets or borrow funds against them. The company was founded in 2017 by Alex Mashinsky, an entrepreneur and inventor known for his contributions to the Voice Over Internet Protocol (VoIP) industry. Celsius gained popularity among crypto investors due to its high interest rates and low fees.

However, the company faced financial difficulties in 2021 as the crypto market experienced a sharp downturn. In July 2022, Celsius filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. The company cited a range of factors, including market volatility, regulatory scrutiny, and liquidity issues.

As part of its bankruptcy proceedings, Celsius has been exploring various restructuring options to address its financial challenges. The proposed plan sponsored by NovaWulf is one such option that seeks to create a fair and transparent process for creditors and other stakeholders.

In summary, the disclosure statement that Celsius Network plans to file on April 12 is a significant step forward in its Chapter 11 bankruptcy proceedings. The statement will provide claim holders with vital information about the proposed restructuring plan, including projected recoveries and details of the events leading up to Celsius’ bankruptcy. The restructuring plan, which aims to create a public platform fully owned by Earn creditors, is a key part of Celsius’ efforts to emerge from bankruptcy and restore its financial health.