Bankrupt cryptocurrency lender Celsius, its creditors and Series B holders have reached a settlement regarding the distribution of $25 million in proceeds from the sale of crypto custodian GK8.
According to the filing, the settlements seek to deploy $24 million for legal costs while allocating the remaining $1 million to Series B holders. The court document also states that the settlement agreement arose out of the “ mutual desire” to avoid costly litigation and a thorough confirmation process, which would result in higher professional fees.
- The agreement between the debtors, the committee and the original consenting Series B preferred holders was said to have been “thoughtfully and eminently reasonably negotiated.”
- THE deposit read,
“The settlement ends nearly a year of highly contentious litigation and removes one of the biggest hurdles to confirmation and emergence in exchange for a $25 million cash settlement from the proceeds of the sale of GK8 and a mutual release of claims between the Initial Consent Series B Preferred Holders and assignees.
- GK8 was originally acquired by Celsius for an unknown amount, which was later disputed at $115 million, in November 2021.
- However, while Celsius filed for Chapter 11 bankruptcy last summer following the collapse of Terra’s ecosystem, Galaxy Digital, led by Mike Novogratz, agreed to buy the company. Israel-based company in bankruptcy proceedings.
- Former Celsius CEO Alex Mashinsky was arrested last week and charged with wire fraud and other crimes.
- US prosecutors also alleged that the executive raised the price of his company’s cryptocurrency to attract customers to the platform.
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