Celsius creditors vote in favor of reorganization plan

The majority of creditors impacted by the Celsius bankruptcy voted on a plan that would return crypto back to them and distribute equity in a new company. 

Most classes voted in favor of the plan by more than 98 percent, according to bankruptcy firm Stretto.

Next, the U.S. Bankruptcy Court for the Southern District of New York will hear the case and rule on final approval at a hearing currently scheduled for Oct. 2. The deadline to vote on the plan was Sept. 22. 

Under the plan, which had support from the Official Committee of Unsecured Creditors, debtors will distribute about $2 billion worth of bitcoin and ether to creditors, according to a letter from that group in August. 

NewCo

"The Debtors will also distribute equity in a new company ('NewCo') to creditors," the committee said last month. "NewCo will operate and further build out the Debtors’ Bitcoin BTC +1.40% mining operations, stake Ethereum ETH +2.45% , monetize the Debtors’ other illiquid assets, and develop new, value-accretive, regulatory-compliant business opportunities."

NewCo will be managed by the Fahrenheit Group, they added. Fahrenheit is a consortium that made the winning bid to acquire Celsius’ assets in May. 

Celsius filed for bankruptcy last year and owes billions of dollars to investors. The SEC sued Celsius and its former CEO Alex Mashinsky in July for allegedly raising billions through fraudulent and unregistered sales of "crypto asset securities," repeatedly lying to investors about Celsius' financial standing, and manipulating the price of CEL, the company's native token.