As we have been discussing in prior updates, the bankruptcy case of Celsius Network LLC is reaching an important milestone as most creditors now have the ability to vote on the Plan of Reorganization proposed by the Debtors (the “Plan”). Assuming that the Plan is approved, which we are expecting it will be, the Court has scheduled a hearing to confirm the Plan on October 2, 2023. Barring any unforeseen hurdles or objections to confirmation, the Plan should become effective soon after its confirmation on October 2, 2023. At the effective stage of the Plan, most of the digital assets held by the Debtors will be sold and the initial payment to Earn creditors will be made.

A number of creditors have asked us about the voting procedures which we outline below.

1)  Outline of General Information:

• If you are a Celsius creditor by virtue of being a member of its Earn program as well as a number of other types of account holders, you should have already received a packet with voting information via email or USPS first-class mail. The email may come from “noreply@cases-cr.strett-services.com.”

• The packet will include a link to an online voting portal and a personal password, which allows you to access a personalized form to vote on the Debtors’ Chapter 11 Plan.

• If you are a Celsius account holder and have not yet received the above-referenced packet, you may submit the email address linked to your Celsius account at this link to have the relevant voting information re-sent to your email address.

• In some ways, the Plan provides better treatment for creditors who vote to accept the Plan. Accordingly, such creditors should carefully review the solicitation materials (discussed below) and consult with their legal advisors if they feel such is needed regarding their rights under the Plan.

• If you have a non-customer claim, use this link to vote on the Plan.

• Holders of “General Custody Claims” (Class 6A of the Debtors’ Plan) that did not previously elect to participate in the Custody Settlement will have the option to elect one of two treatments on their ballot forms: broadly speaking, “Treatment A” will give such holder a payment of 72.5% of the amount of such Allowed General Custody Claim in cryptocurrency, while “Treatment B” will transfer the cryptocurrency associated with the claim to a wallet to be held by the Debtors after the Plan is confirmed, and such funds will be subject to avoidance actions for 180-days, after which, if no avoidance action is brought, such funds will be released to the holder of the claim.

• Holders of a “Withhold” claim (Class 7 of the Debtors’ Plan) will receive better treatment if the class, as a whole, votes to accept the Plan. Specifically, if the class votes to accept the Plan, holders of Withhold claims will receive a distribution of cryptocurrency equal to 15% of the value of their Withhold claim along with a pro rata share of the Unsecured Claim Distribution Consideration (i.e., Liquid Cryptocurrency, Litigation Proceeds, and NewCo Common Stock). If the class, as a whole, does not accept the Plan, holders of Withhold claims will receive only their pro rata share of the Unsecured Claim Distribution Consideration.

For more information on the voting process , please visit https://case.stretto.com/Celsius/balloting. This link will take you to the website for the Debtors’ Solicitation Agent. Even if you did not receive your ballot, eligible claims are able to submit the email address linked to their Celsius account, via the website linked above, in order to have their ballot information re-sent to their email address. Delivery of a Ballot to the Solicitation Agent by e-mail, facsimile, or other electronic means, other than via the online voting portal, will not be valid.

In any event, all parties seeking to vote on the Plan should submit their ballot before September 22, 2023, at 4:00 PM Eastern Time.

2)  Instructions to Submit Such a Ballot:

Step 1: Please see if you have an email with a password for your claim. If you have one, click on the link to obtain the solicitation package.

Step 2: Review the Solicitation Package

The online solicitation package will contain the following information:

Plan of Reorganization and Disclosure Statement
Solicitation and Voting Procedures
Confirmation Hearing Notice
Notice of Claims Settlement
Cover Letter
Letter from Official Committee of Unsecured Creditors
Order Approving Disclosure Statement

Step 3: Do you have a customer claim or non-customer claim?

Account Holder Claims:
If you are a Holder of Class 2 Retail Borrower Deposit Claims, Class 4 Convenience Claims, Class 5 General Earn Claims, Class 6A General Custody Claims, Class 7 Withhold Claims, or Class 11 De Minimis Claims, please proceed to Step 4.
Claims and Interests other than Account Holder Claims:
If you are a Holder of Class 8 Unsecured Loan Claims, Class 9 General Unsecured Claims, Class 10 State Regulatory Claims or Class 14 Series B Preferred Interests, please click here to complete your ballot electronically. Holders of claims in Class 1 Other Secured Claims, Class 3 Other Priority Claims, Class 6B Withdrawable Custody Claims, Class 15 Other Interests, or Class 17 Equitably Subordinated Claims, may also use the above link to access their Non-Voting Status Notice and submit an opt-out form.

Step 4: Review if you have the option to opt out of the settlement for fraud claims. It is generally recommended that a creditor not opt out of this settlement. Although a creditor will be waiving fraud claims by accepting this settlement in exchange for a 5% increase in their claim, the difficulty of separately pursuing a claim on its own makes the settlement, generally, the better path.

Step 5: Submit your ballot by September 22, 2023, at 4:00 PM Eastern Time. It is our recommendation that creditors vote on the Plan unless they have a plan to object to it.

As mentioned above, this is being provided for informational purposes only. For any specialized legal advice, please consult your counsel.