According to Blockbeats: On December 28, the U.S. Bankruptcy Court for the Southern District of New York approved a proposal put forward by Celsius to capitalize a new Bitcoin mining entity with $225 million, as part of its Chapter 11 bankruptcy proceedings. The approval of the "MiningCo Transaction" by Chief Judge Martin Glenn marks a significant milestone in Celsius's restructuring journey, as the court overruled all objections against the proposal.
The court's decision gives Celsius the green light to proceed with transactions aimed at stabilizing and reorganizing the company's operations. Part of this effort includes forming a publicly-traded company dedicated to Bitcoin mining. The MiningCo Transaction comprises a $225 million cash infusion to capitalize the new venture (NewCo) and a transfer of certain mining assets to NewCo, with Core Rhodium, Mawson, and Luxor assets excluded.
The court also approved the revisions to the management agreement, setting an initial term of four years, with specific conditions for possible extensions or early termination. Notably, if NewCo does not achieve the specified 23 EH/s Exahash mining capacity within the first three years, it has the option to terminate the agreement without any early termination fee, subject to a six-month transition period.
The court further approved the "liquidation budget and procedures," vital for executing the plan in an orderly manner. The budget, which outlines major expenses including administrative fees, professional fees, and operating expenses amounting to around $70 million, will support the distribution of asset sales proceeds and property management.
While addressing the Securities and Exchange Commission’s (SEC) rights concerning crypto tokens, the court clarified that its decision should not serve as a judgment on the status of crypto tokens or transactions involving them under federal securities laws, thereby preserving the SEC's power to scrutinize crypto token transactions.
This court approval suggests a move towards an orderly liquidation process, providing a different but potentially better outcome for creditors compared to the original plan.
