Celsius Network seeking court approval for repayment plan
Celsius Network, the embattled crypto lender, is making strides toward repaying its customers by the end of 2023.
The company’s legal counsel, Christopher Koenig, recently revealed during an October 2 hearing in New York that they are pursuing court approval for a reorganization plan that promises a brighter future for the platform.
Celsius Network’s commitment to repay its creditors and revitalize its operations by the end of the year is an ambitious endeavour that awaits the court’s nod of approval. The platform’s customers, who have been patiently waiting for resolution since June 2022, will be closely monitoring the developments as Celsius Network navigates its path to financial recovery.
Celsius Network to repay creditors in cryptoCopy link to section
Celsius Network intends to partially repay its creditors using cryptocurrencies, specifically $2.03 billion in Bitcoin (BTC) and Ethereum (ETH). Additionally, creditors will receive stock in the freshly established NewCo. This multi-faceted approach aims to make creditors whole again.
In the meantime, under the proposed restructuring plan, a new entity named “NewCo” is set to be launched, bolstered by a substantial $450 million in seed funding.
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This development marks a crucial step towards the platform’s revival.
Celsius’ legal battleCopy link to section
The fate of Celsius Network’s reorganization plan hinges on legal approval, currently under consideration by Judge Martin Glenn. The plan’s clearance by security regulators is also a critical milestone that must be achieved.
Despite receiving overwhelming support from creditors, with over 95% in favour, some challenges to the plan persist.
Celsius Network’s tumultuous journey, sparked by the collapse of the Terra/Luna ecosystem and the subsequent suspension of withdrawals in June 2022, could find resolution through this restructuring plan. If approved, it would mark a noteworthy event as one of the first failed crypto platforms from 2022 to successfully undergo a Chapter 11 bankruptcy revival.