Celsius Network LLC is considering issuing a new digital-asset token to repay creditors as part of a proposal to reorganize and exit bankruptcy as a regulated crypto platform, the company said in court Tuesday.
(Bloomberg) — Celsius Network LLC is considering issuing a new digital-asset token to repay creditors as part of a proposal to reorganize and exit bankruptcy as a regulated crypto platform, the company said in court Tuesday.
Reorganizing Celsius into a publicly-traded company that is properly licensed would bring in more money for creditors than selling hard-to-liquidate assets at today’s depressed prices, company attorney Ross M. Kwasteniet said during a video-court hearing.
Celsius has been negotiating with various creditor groups over how to set up the new company and issue a new token to creditors as part of a payout plan, Kwasteniet told US Bankruptcy Judge Martin Glenn, who is in New York.
Any reorganization plan would first go to creditors, including Celsius customers who have cryptocurrency on the company’s platform, for a vote. Glenn would take that vote into consideration before deciding whether to approve the proposal.
After Celsius filed for bankruptcy last year, the company solicited bids for its assets and tried to sell itself as an operating business. The offers for individual assets “have not been compelling,” Kwasteniet said.
The company will file court papers with details about its plans later this week, Kwasteniet said. Any new company would be organized around assets that include a portfolio of loans and other investments, along with tens of thousands of cryptocurrency mining machines, he added.
Cryptocurrency mining has become more lucrative in recent months, a company financial adviser said during the hearing.
The bankruptcy is Celsius Network LLC, 22-10964, US Bankruptcy Court for the Southern District of New York (Manhattan).
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