The bankrupt cryptocurrency lender, Celsius Network, is currently searching for additional bids and examining new buyers despite having an offer on the table.
During a court hearing in Manhattan Wednesday, Celsius legal representative Chris Koenig said the company is still open to higher offers, according to a Reuters report. He added that the lender’s official unsecured creditors committee (UCC) met with a potential buyer just days ago to assess an alternative proposal.
The crypto lender also asked judge Martin Glenn, who is managing Celsius’ Chapter 11 bankruptcy proceedings, during the hearing to extend the time limit for submitting a bankruptcy restructuring plan structured around the NovaWulf deal. The judge accepted Celsius’s request for an additional three weeks.
As previously reported, in mid-February, NovaWulf Digital Management reached a deal with Celsius to purchase its lending operations and help bring an end to its bankruptcy case. Debtors of Celsius Network presented the sale plan to the U.S. Bankruptcy Court of the Southern District of New York.
The plan, which proposes a deal with NovaWulf that would permit the crypto lender to commence returning crypto assets to customers in June, has the support of the firm’s creditors committee and is part of the overall reorganization plan for the company’s retail platform and mining business.
As part of the plan, a “convenience class” of creditors, those with claims under $5,000 associated with Celsius Earn Accounts, will receive 70% recovery of their funds in the form of a one-time payment in Bitcoin, Ethereum or the stablecoin USDC.
On the other hand, Celsius customers who are owed more than $5,000 will be allowed to reduce their claim to that amount to join the class, and creditors owed at least $1,000 can opt out of the class and receive a portion of yet-to-be-determined funds recovered for general Earn participants.
If Celsius chooses an alternate bidder, it intends to offer NovaWulf up to $20 million in breakup fees, the report said.
Celsius filed for Chapter 11 bankruptcy in July last year in an effort to restructure and stabilize its business and maximize value for all its stakeholders.
Celsius Sets Aside $25M for Withdrawals
As part of the latest development in the Celsius bankruptcy operations, the crypto lender has created a wallet with $25 million of digital assets for its custodial account holders to withdraw. The funds include $10.39 million of USDC, $8.8 million of ETH, and another $6 million worth of digital assets.
By Wednesday, custody account holders had withdrawn $17.7 million of these cryptocurrencies, Celsius interim Chief Executive Chris Ferraro said in a court hearing, noting that another $3.5 million of withdrawals are in the process. That represents 60% of eligible custody users and 80% by crypto value, he said.
Earlier this month, Celsius said that has it opened withdrawals for select custodial account holders with certain restrictions after securing approval from the U.S. bankruptcy court. Celsius was authorized to distribute 94% of each eligible user’s custody assets, according to a court document.
