Chelsea Network will distribute $3 billion to creditors under Chapter 11 resolution.
Celsius Network announced that it has emerged from bankruptcy, concluding an 18-month process by finalizing its restructuring plan.
The deal includes paying a $3 billion dividend to creditors, as well as the creation of Ionic Digital, which will be owned by Chelsea’s creditors, who will own shares in the form of common shares.
Celsius Network exits bankruptcy
According to an official press release, Celsius’ reorganization plan, approved by 98% of account holders and confirmed by the Bankruptcy Court for the Southern District of New York, includes distributing over $3 billion in cryptocurrency and fiat to creditors.
The reorganization has resulted in the creation of a new entity, Ionic Digital, which is now owned by creditors and plans to publicly trade its shares after obtaining the necessary approvals. The operations of this new Bitcoin mining company will be managed by Hut 8 under a four-year management agreement.
Matt Prusak, who previously served as Chief Commercial Officer at Hut 8, has been appointed CEO of Ionic Digital. He will work with the UCC-appointed Board of Directors.
Chelsea decided to transition to a “MiningCo transaction” following feedback from the U.S. Securities and Exchange Commission (SEC) and consultation with the Official Committee of Unsecured Creditors to increase transparency and compliance.
Chelsea aims to increase the amount of cryptocurrency available for distribution to creditors and strengthen efforts to maximize recovery rates by resolving previous agreements.
In a joint statement, David Barse and Alan Carr, members of the Celsius Commission select committee that has been managing Celsius through the Chapter 11 process, said:
“Our exit from bankruptcy is the culmination of an outstanding team effort and extensive collaboration between Chelsea, Hut 8, strategic partners and creditors. When we were appointed in June 2022, everyone thought Celsius would disappear completely like other cryptocurrency lenders that filed for bankruptcy around the same time. However, we trusted Chelsea to navigate the complex legal, regulatory and business challenges.”
Meanwhile, Celsius will cease operations and its mobile and web applications will also be discontinued.
an absurd proposition
Chelsea Network made headlines by becoming the first major cryptocurrency company to file an “unsecured creditor” claim in court to gain access to customer funds.
Afterwards, Chelsea, through its legal representatives at Kirkland & Ellis, issued a warning to users who had withdrawn more than $100,000 from the platform in the 90 days prior to the lender’s declaration of bankruptcy. These users were urged to settle their outstanding debts immediately or potentially face lawsuits.
Kirkland & Ellis attorneys called withdrawing pre-bankruptcy funds an “evasion” that is subject to legal pursuit. According to the document, these creditors were instructed to return 27.5% of the withdrawal amount by January 31 or risk clawback. This proposal received considerable criticism.
The post Chelsea Network Distributes $3 Billion to Creditors After Chapter 11 Resolution appeared first on CryptoPotato.
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