restructuring plan

Celsius Network Announces Disclosure Statement for Chapter 11 Plan

In a court filing on March 31, Celsius Network revealed that it plans to file a disclosure statement on April 12, containing details about the events that led to its bankruptcy, projected recoveries for certain stakeholders, and answers to frequently asked questions. This is part of its Chapter 11 restructuring plan, which was proposed in February and aims to create a public platform called NewCo that is fully owned by Earn creditors. The restructuring plan is sponsored by NovaWulf, and the committee of unsecured creditors will appoint the majority of the firm’s board members, with no involvement from Celsius founder.

The bankruptcy court is expected to hold a hearing regarding approval of the disclosure statement on May 17, with a vote on the plan to follow. If approved, the restructuring plan would allow Earn creditors to take full ownership of NewCo and appoint a majority of the board members. This would result in no involvement or relationship with the Celsius founder.

Since filing for Chapter 11 in July 2022, Celsius Network’s bankruptcy proceedings in court have included discussions on assets from the firm’s Earn program, crypto holdings, Bitmain coupons, and personal information of its users. In March, the bankruptcy judge approved a settlement plan allowing Celsius custody account holders to receive back 72.5% of their crypto.

Celsius Network was founded in 2017 as a peer-to-peer lending platform for cryptocurrency. The company’s main product, the Earn program, allows users to earn interest on their cryptocurrency holdings. The platform has gained popularity in recent years, with over 1 million users and more than $25 billion in assets under management.

The company filed for Chapter 11 bankruptcy in July 2022, citing liquidity issues and regulatory pressures. Since then, the company has been working on a restructuring plan to address its financial difficulties and ensure the protection of its users’ assets.

The proposed restructuring plan, sponsored by NovaWulf, aims to create a public platform called NewCo that is fully owned by Earn creditors. This would allow users to have more control over the platform and its operations, with no involvement or relationship with the Celsius founder.

The upcoming disclosure statement, to be filed on April 12, will provide claim holders with more information about the restructuring plan and its potential impact on their assets. The statement will also provide answers to frequently asked questions and include details of events leading up to Celsius’ bankruptcy.

The bankruptcy court is expected to conduct a hearing regarding approval of the disclosure statement on May 17, with a vote on the plan to follow. If the plan is approved, it could be a positive step for Celsius Network and its users, providing a path forward for the company to address its financial difficulties and regain stability.

Celsius Network to File Disclosure Statement for Restructuring Plan

Bankrupt crypto lender Celsius Network has announced it will be moving forward on its Chapter 11 restructuring plan with a disclosure statement containing information for claim holders. The statement is set to be filed on April 12, providing adequate information for claim holders to vote on the proposed restructuring plan sponsored by NovaWulf.

Celsius first presented the plan in February, which proposed creating a public platform fully owned by Earn creditors called NewCo. The committee of unsecured creditors will appoint the majority of the firm’s board members, with no Celsius founder involvement or relationship. The goal of this plan is to ensure a fair restructuring process that prioritizes the interests of creditors and other stakeholders.

The debtors’ statement regarding the plan reveals that the April 12 filing will include details of events leading up to Celsius’ bankruptcy, projected recoveries for certain stakeholders should the restructuring plan be approved, and answers to frequently asked questions. The bankruptcy court is expected to conduct a hearing regarding approval of the disclosure statement on May 17, with a vote on the plan to follow.

Since filing for Chapter 11 in July 2022, Celsius’ bankruptcy proceedings in court have included discussions on assets from the firm’s Earn program, crypto holdings, Bitmain coupons, and personal information of its users. In March, the bankruptcy judge approved a settlement plan allowing Celsius custody account holders to get back 72.5% of their crypto.

Celsius Network is a crypto lending platform that enables users to earn interest on their crypto assets or borrow funds against them. The company was founded in 2017 by Alex Mashinsky, an entrepreneur and inventor known for his contributions to the Voice Over Internet Protocol (VoIP) industry. Celsius gained popularity among crypto investors due to its high interest rates and low fees.

However, the company faced financial difficulties in 2021 as the crypto market experienced a sharp downturn. In July 2022, Celsius filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. The company cited a range of factors, including market volatility, regulatory scrutiny, and liquidity issues.

As part of its bankruptcy proceedings, Celsius has been exploring various restructuring options to address its financial challenges. The proposed plan sponsored by NovaWulf is one such option that seeks to create a fair and transparent process for creditors and other stakeholders.

In summary, the disclosure statement that Celsius Network plans to file on April 12 is a significant step forward in its Chapter 11 bankruptcy proceedings. The statement will provide claim holders with vital information about the proposed restructuring plan, including projected recoveries and details of the events leading up to Celsius’ bankruptcy. The restructuring plan, which aims to create a public platform fully owned by Earn creditors, is a key part of Celsius’ efforts to emerge from bankruptcy and restore its financial health.

SEC Raises Objections to Celsius Network's Restructuring Plan Involving Coinbase

Key Takeaways

SEC files limited objection against Celsius Network’s restructuring plan.

Concerns raised over the company’s proposed engagement with Coinbase.

SEC’s ongoing lawsuit against Coinbase cited as complicating factor.

Next bankruptcy court hearing scheduled for October 5, 2023.

Background and Timeline

Celsius Network filed for Chapter 11 bankruptcy after announcing a $14 million agreement with Core Scientific, a mining company. Since filing for bankruptcy in July 2022, Celsius has reportedly failed to meet its payment obligations to Core Scientific. The restructuring plan has undergone several amendments since its initial filing in March 2023, with the fourth iteration submitted in August 2023. The bankruptcy court has yet to approve the plan, and the next hearing is scheduled for October 5, 2023.

SEC’s Concerns

The SEC’s limited objection focuses on Celsius Network’s proposed engagement with Coinbase, which is intended to act as a Distribution Agent for international customers under the restructuring plan. The SEC argues that the role of Coinbase in the arrangement “goes far beyond the services of a distribution agent,” potentially implicating brokerage and master trading services. These services are central to the SEC’s ongoing lawsuit against Coinbase, initiated in June 2023. The SEC has reserved the right to object further based on the outcome of this and other related cases.

Coinbase’s Response

Coinbase CEO Brian Armstrong and Chief Legal Officer Paul Grewal took to social media to express their support for Celsius Network. They questioned why the SEC would object to a “trusted US public company” taking on the role of distributing assets back to Celsius customers. The statement raises questions about the SEC’s motives and adds another dimension to the ongoing legal complexities.

Implications and Next Steps

The SEC’s objection could potentially delay or alter the terms of Celsius Network’s restructuring plan. It also raises questions about the regulatory landscape for crypto companies engaging with traditional financial institutions. The bankruptcy proceeding is set to continue, with the next hearing scheduled for October 5, 2023. The SEC reserves the right to object further based on the outcome of this and other related cases.

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Celsius to Transition to Mining-Only NewCo following Bankruptcy Court's Confirmation of Plan

Celsius Network LLC, a global cryptocurrency platform, is set to undergo a significant transformation following the confirmation of its Chapter 11 plan by the United States Bankruptcy Court for the Southern District of New York. This change comes after facing challenges with the U.S. Securities and Exchange Commission (SEC).

The restructuring plan initially involved creating a new company with Fahrenheit, LLC, focusing on various crypto business activities. However, the SEC’s request for more information about Celsius’ assets has led to a strategic pivot. Celsius is now planning to transition to a publicly traded Bitcoin mining company, owned by its customers, known as Mining NewCo.

Fahrenheit, an investment vehicle, had emerged as a key player in Celsius’ reorganization plans. The SEC’s involvement and requests for detailed information about Celsius’ assets and business operations have significantly influenced the new direction. There are ongoing discussions about the management and future of Mining NewCo.

Celsius had filed for Chapter 11 bankruptcy in July 2022, revealing a $2 billion deficit in its balance sheet. The plan included returning cryptocurrencies to its customers and creating a new company focused on Bitcoin mining. This pivot to mining is a response to the regulatory scrutiny, particularly from the SEC, which has been a significant factor in shaping the company’s post-bankruptcy trajectory.

The confirmation of Celsius’ restructuring plan marks a new chapter in the company’s journey. While the company initially faced a significant deficit and regulatory challenges, the transition to a mining-only model under NewCo represents a strategic shift. This shift aims to address regulatory concerns and set a path for recovery and growth in the evolving cryptocurrency landscape. Celsius’ focus on Bitcoin mining signifies its adaptation to the changing regulatory and business environment.

SAP Announces 2 Billion Euro Restructuring Plan Affecting 8,000 Jobs

SAP SE, a global leader in enterprise application software, has announced a sweeping restructuring plan for 2024, with a budget of approximately €2 billion. This strategic move will impact around 8,000 roles within the company, as SAP pivots to concentrate more on artificial intelligence (AI)-driven business areas. This decision reflects the evolving landscape of the technology industry, where AI and cloud-based solutions are increasingly becoming pivotal.

SAP’s restructuring is part of its broader ambition to adapt to the changing demands of the digital economy. The company plans to enhance its focus on Business AI, which it identifies as a key strategic growth area. Through this process, SAP aims to transform its operational setup to capture organizational synergies and drive AI-based efficiencies. This transformation is expected to prepare the company for scalable future revenue growth.

The restructuring strategy involves a mix of voluntary leave programs and internal re-skilling measures to manage the transition of the workforce. Despite the significant number of roles affected, SAP anticipates maintaining a headcount similar to current levels by the end of 2024, reflecting re-investments in strategic growth areas.

Financially, SAP projects that the majority of the restructuring expenses, estimated at around €2 billion, will be recognized in the first half of 2024, impacting IFRS operating profit. However, excluding these restructuring expenses, the program is expected to yield only a minor cost benefit in 2024. SAP’s 2024 financial outlook and the updated 2025 non-IFRS operating profit and free cash flow ambition fully reflect these expected cost savings and re-investments.

For 2024, SAP forecasts significant growth in its cloud revenue, projecting an increase of 24% to 27% at constant currencies, compared to €13.66 billion in 2023. The company also expects an increase in cloud and software revenue, estimating a rise of 8% to 10% at constant currencies, compared to €26.93 billion in 2023.

SAP’s proactive move towards AI-driven business areas aligns with the trends observed across the technology sector. Major tech firms are increasingly focusing on AI and automation to enhance efficiency and innovation. SAP’s early experimentation with OpenAI’s ChatGPT and plans to embed generative AI technology in its products underscore its commitment to this strategic direction.

In conclusion, SAP’s €2 billion restructuring plan marks a significant step in its evolution as a technology leader. By focusing on AI-driven business areas and enhancing operational scalability, SAP is positioning itself to effectively navigate the rapidly changing landscape of the tech industry. The company’s efforts to maintain workforce levels through re-skilling and voluntary programs demonstrate a commitment to its employees during this transformative phase. With these measures, SAP aims to bolster its position as a major player in the enterprise software market, adapting to meet the future needs of the digital economy.