Benzinga - Bankrupt crypto lender Celsius (CRYPTO: CEL) sought approval regarding the distribution of funds from its sale of the self-custody platform GK8.
On July 17, the debtors of the Celsius Network filed a document stating that its Series B holders have reached a consensus to distribute $25 million from the proceeds of GK8's sale.
The debtors, the creditors' committee and the initial consenting Series B preferred holders agreed on the settlement.
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Shareholders suggested allocating $24 million for legal expenses, with the remaining $1 million to be shared among the holders.
"In light of the fact that the primary purpose of the settlement is to reduce administrative costs, the debtors agreed to and remain supportive of the proposed allocation, which provides the initial consenting Series B holders with reciprocal benefits," the filing stated.
The settlement agreement was based on the mutual interest to avoid expensive litigation and a protracted confirmation process, which would result in increased professional fees.
"The settlement not only unlocks tremendous value for the debtors’ creditors but also affords the debtors and all parties priceless certainty of the way forward. For the reasons set forth herein and the motion, the court should overrule the objections and grant the relief requested in the motion," the filing further stated.
Celsius purchased the Israeli self-custody startup GK8 for $115 million in late 2021.
However, following Celsius' collapse in 2022, the troubled crypto lender was compelled to sell GK8 as part of its restructuring plan.
Galaxy Digital (OTC: BRPHF), an investment firm led by Mike Novogratz, won the bid to buy GK8 in late 2022.
As part of the acquisition, Galaxy gained GK8’s team of 40 experts, including cryptographers and blockchain engineers, along with an office in Tel Aviv.
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