{"id":11700,"date":"2023-08-14T19:29:09","date_gmt":"2023-08-14T19:29:09","guid":{"rendered":"https:\/\/isafespend.com\/investing\/crypto-lender-celsius-sends-bankruptcy-plan-to-creditor-vote\/"},"modified":"2023-08-14T19:29:09","modified_gmt":"2023-08-14T19:29:09","slug":"crypto-lender-celsius-sends-bankruptcy-plan-to-creditor-vote","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=11700","title":{"rendered":"Crypto lender Celsius sends bankruptcy plan to creditor vote"},"content":{"rendered":"
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\u00a9 Reuters. Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS\/Dado Ruvic\/Illustration\/file photo<\/span>
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By Dietrich Knauth<\/p>\n

NEW YORK (Reuters) – Crypto lender Celsius Network on Monday received a U.S. bankruptcy judge’s permission to seek creditor approval for its bankruptcy plan, advancing a proposal to exit Chapter 11 as a new entity owned by its creditors.<\/p>\n

Judge Martin Glenn signed off on Celsius’s disclosure statement and solicitation materials at a U.S. Bankruptcy Court hearing in Manhattan, saying Celsius had given creditors sufficient information to vote on the proposed restructuring.<\/p>\n

Some creditors oppose the plan, but the official committee appointed to represent junior creditors supports it and will recommend that Celsius customers vote in favor. <\/p>\n

New Jersey-based Celsius filed for Chapter 11 protection in July 2022, one of several crypto lenders to go bankrupt following the rapid growth of the industry during the COVID-19 pandemic. Celsius had 600,000 customers who held about $4.4 billion in interest-bearing Celsius accounts when it filed for bankruptcy, according to court documents. <\/p>\n

Celsius’s bankruptcy plan would return some crypto deposits to retail customers and hand control of remaining business lines – including bitcoin mining and staking – to the Fahrenheit Group, a consortium that includes blockchain-based venture capital firm Arrington Capital. <\/p>\n

Celsius estimates that most of its customers, who had interest-bearing Earn accounts, will receive a 67% recovery, through return of liquid crypto assets like and Ether, equity shares in the new company, and proceeds of post-bankruptcy litigation against company founder Alex Mashinsky and others. Customers will generally receive a higher recovery on other, non-interest-bearing accounts.<\/p>\n

Fahrenheit will buy a minority stake in the new business for $50 million and will publicly list the new company’s stock on Nasdaq. This will allow Celsius customers to sell equity shares that they will receive as part of their bankruptcy recovery, according to court documents.<\/p>\n

The reorganized company will pursue litigation against Mashinsky, who already faces U.S. criminal charges and a New York civil lawsuit for allegedly misleading customers and artificially inflating the value of his company’s propriety crypto token. Mashinsky has pleaded not guilty. <\/p>\n

Celsius creditors have a Sept. 20 deadline to submit votes on the proposal, and Celsius intends to seek final court approval of its restructuring plan on Oct. 2, according to court documents. <\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. Celsius Network logo and representations of cryptocurrencies are seen in this illustration taken, June 13, 2022. REUTERS\/Dado Ruvic\/Illustration\/file photo By Dietrich Knauth NEW YORK (Reuters) – Crypto lender Celsius Network on Monday received a U.S. bankruptcy judge’s permission to seek creditor approval for its bankruptcy plan, advancing a proposal to exit Chapter 11<\/p>\n","protected":false},"author":1,"featured_media":9668,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[32],"class_list":{"0":"post-11700","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing","8":"tag-featured"},"yoast_head":"\nCrypto lender Celsius sends bankruptcy plan to creditor vote | iSafeSpend<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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