Celsius Triumph: ‘MiningCo Transaction’ Gets Green Light

Celsius approved the “MiningCo Transaction” in the Chapter 11 bankruptcy proceedings when Chief Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York gave the green light on December 27. This order is a pivotal step forward, as all objections to the proposal were dismissed.

The court’s decision enables Celsius to move forward with its restructuring plan, creating a “public company focused solely on bitcoin mining.” The MiningCo Transaction includes key terms like capitalizing the new entity (NewCo) with $225 million in fiat. It also involves transferring specific mining assets to NewCo, excluding Core Rhodium, Mawson, and Luxor assets.

New Management Terms, SEC Clarity

Moreover, the court approved changes to the Management Agreement, setting the initial term at four years with conditions for extension or early termination. If NewCo doesn’t meet the specified Exahash Target of 23 EH/s within three years, it can terminate the agreement without an early termination fee, given a six-month transition period.

The court also gave the nod to the “Wind-Down Budget and Procedures,” crucial for executing the plan orderly. This budget covers significant expenses, totaling about $70 million, supporting asset sales distribution and estate administration.

Addressing the Securities and Exchange Commission’s (SEC) concerns on crypto tokens, the court clarified. The court emphasized that its decision doesn’t determine the status of crypto tokens or related transactions under federal securities laws. This preserves the SEC’s authority to challenge such transactions.

This approval marks a shift towards an organized wind-down, deviating from the original plan for better creditor outcomes. Following considerations of objections and supportive statements, the decision reflects the court’s commitment to a just and lawful resolution.

With this ruling, previous agreements on unsecured claims handling are nullified. The court has set new guidelines for winding down operations and managing creditor payouts.

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