Genesis Creditors Ditch Restructuring Plan: Report

April 27, 2023

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According to recent reports, Digital Currency Group (DCG) claimed that a section of Genesis Capital creditors “reneged and raised” further allegations after over a two-month period following settling with a full deal.

Genesis Court Procedure Extends

In accordance with Genesis, the bankruptcy case appeared to be on the verge of being settled, however the recent refusal will probably extend the court procedure.

As per the company’s bankruptcy petition, it owes $2.4 billion to its principal creditors out of almost $3.4 billion in liabilities. Its principal creditors and parent firm consented to a preliminary reorganization plan.

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Creditors are Not Satisfied

According to a DCG statement, “more than two months after all parties agreed to a comprehensive settlement that was submitted by Genesis Capital to the bankruptcy court, a group of Genesis Capital’s creditors has reneged and raised all new demands.”

“We do not know if the hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will prolong the court process.”

Genesis Looking for a Neutral Third Party

As the DCG transaction has struck as an obstacle, the insolvent crypto lender is now looking for a neutral third party to help the parties involved achieve an agreement.

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According to a new court filing, the Debtors feel “the mediation should be scheduled immediately” given that “DCG owes GGC approximately $630 million pursuant to certain fixed term loans due during the second week of May.”

The DCG Bankruptcy Case

The updated restructuring plan proposed by Genesis, Digital Currency Group, and creditors in February was projected to result in creditors recovering no less than 80% of their financial assets back. Genesis Global’s crypto trading and market-making operations were going to be sold in the context of the firm’s restructuring efforts, the company said on February 6 after reaching an “agreement in principle” with Digital Currency Group (DCG) and its creditors.

The crypto currency marketplace restricted withdrawals on its trading platform in November 2022 after the failure of the FTX Derivatives Exchange. The business filed for Chapter 11 bankruptcy on January 19.s