According to a report by Cointelegraph, court documents filed on Wednesday (27th) show that US bankruptcy court judge Martin Glenn has approved the second bankruptcy exit plan agreed upon by creditors of the cryptocurrency lending company Celsius Network. This plan involves the establishment of a publicly traded company specializing in Bitcoin mining, rather than a company managed by the Fahrenheit consortium involving multiple businesses.
This change comes after the US Securities and Exchange Commission (SEC) refused to grant the relief necessary to implement the first plan in the bankruptcy exit plan, which involved the creation of a new company called “NewCo”. According to the original plan, NewCo would expand Celsius’s existing mining operations and business activities and be managed by the Fahrenheit consortium, which is composed of various institutions and investors, including Proof Group, Arrington Capital, and Hut 8.
Court documents state that, according to Reuters, some creditors and the bankruptcy watchdog of the US Department of Justice argued that Celsius should revote on the proposal, however, Judge Glenn determined that the new restructuring strategy would not harm the creditors. According to the new plan, Celsius creditors will receive partial recovery funds through shares in the upcoming Bitcoin mining enterprise. Additionally, the plan releases $225 million worth of crypto assets, originally intended to fund the new business rejected by the SEC. As per the previously approved plan, around $2 billion worth of Bitcoin (BTC) and Ether (ETH) will also be redistributed to Celsius creditors.