US Bankruptcy Court Approves $225M ‘MiningCo Transaction’ for Celsius, Prevents Securities Ruling in Chapter 11 Proceedings
Bankrupt cryptocurrency lending company Celsius Network has achieved a significant milestone in its Chapter 11 bankruptcy proceedings. The United States Bankruptcy Court for the Southern District of New York has granted approval for Celsius Network’s proposed “MiningCo Transaction” within the framework of its Chapter 11 bankruptcy proceedings.
On December 27, Chief Judge Martin Glenn, presiding over the case, issued the order approving the implementation of the MiningCo Transaction proposed by Celsius Network LLC and its affiliated debtors.
With the court’s decision, Celsius can now move forward with the transaction, directing its efforts towards stabilizing and restructuring the company’s operations through the establishment of “a public company exclusively dedicated to bitcoin mining.”
The MiningCo encompasses specific terms and conditions crucial to the restructuring plan. This involves capitalizing the new entity (NewCo) with $225 million in fiat and transferring specified mining assets to NewCo, excluding Core Rhodium, Mawson, and Luxor assets.
In a November court filing, Celsius outlined its plans to relaunch as a new entity referred to as “NewCo” until a permanent name is chosen. This newly formed enterprise, centered on staking and mining, is projected to have a $1.25 billion balance sheet with $450 million in liquid cryptocurrency, as detailed in a court filing. The company anticipates generating “$10 to $20 million per year” through staking crypto on the Ethereum network.
Furthermore, the court’s order greenlights modifications to the Management Agreement, establishing the initial term at four years with provisions for extension or early termination.
Suppose NewCo’s mining capacity fails to reach the specified
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