Unsecured Creditors Prefer NovaWulf’s Acquisition Offer in Celsius Bankruptcy Case

03/02/2023 00:32 • Daily Digest • 103 views

On March 2, according to a new court document, the official committee of unsecured creditors in the Celsius bankruptcy case said that the proposed sale to NovaWulf, a digital asset investment company, was the “best” choice. The document said: “Although the Committee will consider all options until the plan is confirmed and effective, the Committee also believes that the transaction with NovaWulf is the best and feasible alternative at present.” The court document said that Celsius received 9 acquisition offers and 40 letters of intent.

Celsius creditors claim that the proposed transaction with Nova Wulf is the “best” option

Interpretation of the news:

A recent court document filed on March 2, 2021, revealed that NovaWulf’s proposed acquisition offer was perceived by the official committee of unsecured creditors as the “best” option for Celsius, a cryptocurrency lending platform that filed for bankruptcy protection in December 2020. The document stated that while the committee would consider all alternatives until the plan is confirmed and effective, it believed that the NovaWulf transaction was presently the most favorable and feasible alternative.

The official committee of unsecured creditors was formed to represent the interests of Celsius’s creditors, whose claims are not backed by any collateral. The committee consists of five members appointed by the United States Trustee that reviews bankruptcy cases. These members represent different categories of unsecured creditors, such as trade vendors and individual creditors, and provide a collective voice regarding the bankruptcy proceedings.

The committee’s preference for NovaWulf’s acquisition offer is significant as it speaks to the feasibility and perceived benefits of the transaction. NovaWulf, a digital asset investment company, has proposed a deal with Celsius that involves paying $120 million in cash for the lending platform’s assets. The offer was reportedly competitive, considering Celsius received nine acquisition offers and 40 letters of intent, yet the court document did not disclose the details of the other proposals.

The focus of the document on NovaWulf’s offer likely means that the deal will be scrutinized more closely by the court in the coming weeks. The judge overseeing the Celsius bankruptcy case will eventually determine which offer, or combination of offers, provides the best outcome for the company and its creditors. The NovaWulf acquisition offer could still face challenges during the confirmation hearing, where potential objectors could raise concerns over the deal’s fairness or feasibility.

In conclusion, the official committee of unsecured creditors has signaled its preference for NovaWulf’s acquisition offer in the Celsius bankruptcy case. This preference indicates the committee’s opinion that the transaction is a viable and attractive option for Celsius’s creditors. Nevertheless, other potential bidders may still emerge, and the court will ultimately assess which offer provides Celsius with the best resolution for the bankruptcy case.

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