Celsius Inches Closer to Bankruptcy Exit as Over 98% of Creditors Approve Reorganization
Celsius is setting the stage for the company’s bankruptcy exit. Recently, its creditors voted in favor of a reorganization plan presented by the beleaguered crypto lender. The plan proposed offers a return of 67%-85% of holdings to creditors, marking a significant milestone in resolving the financial turmoil that befell Celsius.
Despite an overwhelming majority of more than 98% creditors voting in favor, the plan hasn’t been without its objections. Notably, the U.S. Trustee has expressed reservations, showcasing the complexities involved in the crypto lender’s bankruptcy proceedings.
The U.S. Bankruptcy Court for the Southern District of New York has scheduled a critical confirmation hearing for October 2, where they will deliberate the plan’s final approval.
Asset Sale to Celsius Holdings
Part of the proposed reorganization involves the sale of assets to the crypto consortium, Holdings, encompassing entities like Arrington Capital and U.S. Bitcoin Corp. Winning the bid to acquire the insolvent lender in May 2023, Fahrenheit Holdings stands as a beacon of hope for a streamlined resolution to the bankruptcy.
This vote signifies a pivotal move towards closing the tumultuous chapter of Celsius’ bankruptcy.
The company had declared bankruptcy in July of the preceding year amid a crypto winter. The resignation of its Chief Executive Officer, Alex Mashinsky, in September 2022, added to the organization’s woes. Further complications arose with Mashinsky’s arrest on fraud charges in July 2023, which he has steadfastly denied.
Settlement and Asset Freeze
Despite facing accusations, Celsius confirmed its dedication to reorganization plans. This commitment came after a substantial $4.7 billion settlement with U.S. authorities over fraud allegations. Although released on a $40 million bond, Alex Mashinsky faces a freeze on his banking and real estate assets. Recent court orders highlight the ongoing legal challenges amid the bankruptcy resolution.
These events mark significant steps towards Celsius’s financial stabilization. They highlight the complex challenges and solutions in navigating bankruptcy within the cryptocurrency space. The journey showcases the intricacy involved in resolving such significant legal and financial issues in this emerging field.
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