Bankrupt crypto lender Celsius announced on Twitter that they have selected NovaWulf to sponsor a reorganization plan with the support of the official committee of unsecured creditors (UCC).

The reorganization plan will distribute liquid crypto to all account holders, as well as create a litigation trust and provide creditors with common equity in a NewCo holding illiquid assets like mining, according to Celsius. 

NovaWulf Digital Management (“NovaWulf”) is a digital asset investment firm founded in July of 2021. “The Debtors believe that the NovaWulf plan provides the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers,” Celsius stated in the plan document.

According to the plan, NovaWulf will make a direct cash contribution of $45 million to $55 million to NewCo, a term used a describe a corporate spin-off before it is assigned a final name.

Creditors owed more than $5,000 will be placed in a “Convenience Class”, that will receive a one-time distribution of liquid crypto (in the form of BTC, ETH, and USDC) on the plan effective date. Any creditor is allowed to reduce their claim to that amount to join the Convenience Class.

Celsius summarized key terms on Twitter:

Final definitive documents are being finalized. More details about this plan and other next steps will be shared today in court and at a Spaces event soon.