According to a report by Cointelegraph, court documents filed on Wednesday (27th) reveal that US bankruptcy court judge Martin Glenn has approved the second bankruptcy exit plan agreed upon by the creditors of cryptocurrency lending company Celsius Network. This plan involves the establishment of a publicly traded company specializing in Bitcoin mining, instead of a multi-business company managed by the Fahrenheit consortium.
This change is due to the US Securities and Exchange Commission (SEC) refusing to grant relief required to implement the first proposed plan, which involved the creation of a new company called “NewCo.” According to the original plan, NewCo would expand Celsius’ existing mining operations and business activities, and be managed by the Fahrenheit consortium. The consortium consists of various institutions and investors, including Proof Group, Arrington Capital, and Hut 8.
According to Reuters, some creditors and the US Department of Justice’s bankruptcy oversight agency argued that Celsius should hold a new vote on the proposal. However, Judge Glenn determined that the new restructuring strategy would not adversely affect the creditors. According to the court documents, under the new plan, Celsius creditors will receive partial recovery through shares in the soon-to-be-established Bitcoin mining enterprise. Additionally, the plan releases $225 million worth of crypto assets, which were originally intended to fund the rejected new business by the SEC. According to the previously approved plan, approximately $2 billion worth of Bitcoin (BTC) and Ether (ETH) will also be redistributed to Celsius creditors.
