Celsius Debtors Publishes A Sale Plan And Selects Novawulf As The Plan’s Sponsor

A proposal for the sale of the defunct cryptocurrency lending platform Celsius Network has been submitted to the United States Bankruptcy Court for the Southern District of New York. The plan was approved by the official committee of unsecured creditors (UCC) and is part of a reorganization strategy for Celsius’ retail platform and mining operation.

A foundational contract with NovaWulf Digital Management (“NovaWulf”), a company specializing in digital asset investment, has been reached. This foundational contract serves as the basis for the plan and makes NovaWulf the sponsor.

According to the filing, the debtors chose NovaWulf because it offered the best way to distribute their liquid crypto assets and increase the value of their illiquid assets through a new firm run by skilled asset managers.

Novawulf As The Plan’s Sponsor

The strategy was developed due to a court-approved sales process for the debtors, which lawyers for Celsius Network stated last month. As a way of getting out of the bankruptcy process, the collapsed cryptocurrency lender intends to rebrand itself as an entirely new “rehabilitation corporation” that will be listed on public markets.

During the extensive process of selling the company, the advisors for the debtors communicated with more than 130 parties. A signed agreement for non-disclosure was made with forty potential purchasers.

After multiple discussions, they were left with just six offers for the platform’s retail business and three bids for its mining business. The next thing that needs to be done is to put the finishing touches on a legally binding agreement that will name NovaWulf as the winning bidder.

Under the plan, NovaWulf would make a direct cash contribution to NewCo, a temporary name for the company switch before its switch to a last name. This acquisition amount will range from $45 million to $55 million.

A Sizable Redistribution Of Celsius’ Liquid Assets

Earned creditors will receive a sizable distribution of liquid crypto, with a sizable number of creditors receiving 70% of their money. NewCo will be a publicly traded and reporting company that complies with all regulatory requirements and is wholly owned by Earn’s creditors.

No Celsius founders will participate in NewCo, and the UCC will appoint most of the board members for NewCo. Furthermore, there is a plan to set aside a certain amount, around $50 million, for NewCo’s mining operations.