Celsius Network's Disclosure Statement Gets Court Approval

Celsius Network LLC, commonly referred to as "Celsius," has received approval for its Disclosure Statement from the United States Bankruptcy Court for the Southern District of New York. Here are the primary details surrounding this development:

1. Background: Celsius had previously undergone a Court-approved auction process in May 2023. The outcome of this auction was the selection of Fahrenheit, LLC, termed "Fahrenheit," as the winning bidder.

2. Chapter 11 Plan: Celsius' proposed Chapter 11 Plan, often referred to as the "Plan," involves a transaction with Fahrenheit. This collaboration aims to provide the necessary capital, management expertise, and technology to establish and operate a new entity named "NewCo." A significant portion of the NewCo's Board of Directors will be nominated by the statutory committee of unsecured creditors from Celsius' Chapter 11 cases, known as the "Creditors Committee."

3. Statements from Celsius: Chris Ferraro, the Chief Restructuring Officer & Interim Chief Operating Officer of Celsius, emphasized the company's commitment to achieving the best possible outcome for its customers and creditors. David Barse and Alan Carr, members of the Special Committee of the Board, also highlighted the importance of the Disclosure Statement's approval as a significant step in transitioning Celsius' assets to NewCo.

4. Voting Details: The company has dispatched a Solicitation Package to its eligible creditors, which contains the Disclosure Statement, Plan, voting instructions, and other pertinent information. To be considered, votes must reach Stretto, the company's claims and solicitation agent, by 4 p.m. Eastern Time on September 22, 2023. A Court hearing to review the proposed Plan is slated for October 2, 2023.

5. Plan's Implications: Post the Plan's confirmation, Celsius anticipates distributing Liquid Cryptocurrency to account holders promptly. NewCo will manage Celsius' illiquid assets, including its institutional loan portfolio, mining business, and alternative investments. Account holders of Celsius will hold the entirety of the new equity in NewCo, though this is subject to dilution by equity distributed to Fahrenheit as management fees.

6. Fahrenheit's Perspective: Steve Kokinos from Fahrenheit Holdings expressed optimism about the ongoing developments and reiterated Fahrenheit's commitment to ensuring a successful transition and a promising future for NewCo.

7. Backup Plan: Celsius has a backup bid in place with the Blockchain Recovery Investment Consortium (BRIC) to ensure an orderly wind down of its remaining assets if needed.

8. Further Information: Stakeholders seeking more details about the Chapter 11 filing, including the Plan and Disclosure Statement, can visit https://cases.stretto.com/celsius or https://cases.stretto.com/celsius. Queries can be directed to Stretto via phone or email.

9. Advisory Teams: Several firms are providing advisory services during this process. Kirkland & Ellis LLP, Centerview Partners, C Street Advisory Group, and Alvarez & Marsal are advising Celsius. Meanwhile, White & Case LLP, Perella Weinberg Partners, and M3 Partners are assisting the Creditors Committee. Fahrenheit, LLC is being represented by Brown Rudnick LLP, and the BRIC has engaged Willkie Farr & Gallagher LLP.