Debtors of crypto lender Celsius Network have the power to sell mining company Bitmain coupons worth about $7.4 million following a bankruptcy judge’s ruling.
In a February 16 court filing, U.S. Bankruptcy Judge Martin Glenn said: Said Allowing Celsius debtors to sell Bitmain’s coupons was “in the best interest of the debtor’s property, creditors, and other parties.” The judge’s ruling does not require the debtor to liquidate the holdings in question, but would require the consent of the Committee of Unsecured Creditors.
Christopher Ferraro, Interim CEO of Celsius claimed In its February 9 declaration, the debtor expected to sell Bitmain’s coupons for around $7.4 million. According to the interim CEO, the coupon allowed interested parties to purchase Bitmain mining rigs at discounts of 10% to 30% on future purchases.
Although the $7.4 million is heavily discounted from the approximately $37 million face value of the Bitmain coupon, the debtor acknowledges that such a price is commensurate with the market and expires worthless in the debtors possession. We believe it is preferable to the Bitmain coupons that will become available, said Ferraro. Based on the debtors marketing efforts to sell similar assets, we anticipate that the debtor will need to sell Bitmain coupons at a significant discount to face value.
Judge Glenn’s ruling follows the crypto lending firm’s debtor’s restructuring plan on Feb. 15, with Celsius selecting NovaWulf Digital Management as its sponsor. The proposed plan had NovaWulf offering direct cash contributions of $45 million to $55 million to the newly reorganized company.
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Bankruptcy proceedings for major companies affected by the 2022 market crash are underway in US courts. Cryptocurrency exchange FTX is at the center of a criminal case in federal court as well as facing scrutiny in bankruptcy court, but recently the former CEO turned to insiders, including Sam Bankman-Fried. issued a subpoena.