In a press release issued today, Celsius Network LLC (“Celsius” or the “Company”) said that after consulting with its official committee of unsecured creditors (the “Committee”), it has chosen a proposal from Fahrenheit, LLC (“Fahrenheit”) as the winning bid.
Special Committee of the Board members David Barse and Alan Carr are “very pleased that our competitive auction process produced a positive result for customers,” including, most notably, hundreds of millions of dollars in lower management fee savings and increased distributions of liquid cryptocurrency to Celsius’ customers. We’re glad to see so much competition for the Celsius platform, and we’re excited to work with Fahrenheit to speed up the reorganization and get money back to creditors as soon as possible.
Fahrenheit, including US Bitcoin Corp., Arrington Capital, Proof Group, Steven Kokinos, and Ravi Kaza, will provide the capital, management team, and technology required to establish and operate the new company (“NewCo”) under a Chapter 11 plan according to news reports.
More details about the plan
Account holders will receive liquid cryptocurrency from Celsius, and a new public company (“NewCo”) will be formed to handle Celsius’ illiquid assets.
The new stock in NewCo will be owned entirely by the account holders, diluted only by the management fees paid to Fahrenheit. Creditors will pick a new Board of Directors to run the new firm.
In contrast to the “stalking horse” offer that established the auction floor, this proposal would disperse hundreds of millions of dollars worth of more liquid cryptocurrency. Also, compared to the stalking horse proposal, Fahrenheit’s expected management fees dropped by hundreds of millions. The winning proposal also includes tempting incentives for both Celsius and NewCo to revive their dormant mining rigs and expand their mining operations.
Celsius has a backup offer from the Blockchain Recovery Investment Consortium in case the winning offer from Fahrenheit falls through. Under this alternative proposal, all of Celsius’s unsecured creditors would get ownership participation in a newly formed, publicly listed mining company.
Subject to the approval of the bankruptcy court, Celsius plans to publicly publish a new Chapter 11 plan, a disclosure statement, a plan sponsor agreement with Fahrenheit, and a backup plan sponsor agreement with the BRIC in the coming weeks.
