The beleaguered crypto lending firm, Celsius Network, has received approval from the bankruptcy court to exit bankruptcy and pursue an unconventional recovery plan. As reported by Bloomberg on November 9, the company has been granted permission to transform itself into a creditor-owned Bitcoin (BTC) mining firm.
The approved recovery plan goes beyond the standard procedures for companies emerging from bankruptcy. Celsius Network, which faced a turbulent period marked by frozen account balances and legal challenges, is set to compensate affected users with a combination of cryptocurrency and stock in the revamped company. The distribution of these assets is expected to commence in early 2024.
According to court documents, the settlement values Celsius Network’s CEL token at $0.25. This decision came after objections from some customers and creditors who raised concerns about the token’s reduced value. Despite these objections, Celsius and its unsecured creditors committee successfully argued for the CEL token distribution, and U.S. Bankruptcy Judge Martin Glenn ruled in favor of this approach.
While the bankruptcy court has given its nod to the recovery plan, another hurdle remains in the form of approval from the U.S. Securities and Exchange Commission (SEC). The SEC’s decision is crucial, as a rejection could force Celsius Network to consider liquidating its assets instead. Acknowledging the urgency of the matter, Judge Glenn has urged the SEC to expedite its decision.
The unique nature of Celsius Network’s recovery plan reflects the complexity of the company’s recent history. In July 2023, the U.S. Department of Justice (DOJ) levied criminal charges related to fraud against Celsius Network’s founder, Alex Mashinsky. The DOJ’s charges were followed by reports suggesting that Mashinsky’s criminal trial is scheduled for September 2024.
Source: https://azcoinnews.com/celsius-network-cleared-to-emerge-from-bankruptcy-with-a-unique-twist.html
