Bankruptcy continues to loom over cryptocurrency lender Genesis, as the company filed an updated wind-up plan to address funds owed by its parent company, DCG. Many other creditors including hedge funds and crypto exchanges are also vying for a piece of the Genesis pie, all while mediated talks are still in progress.
The updated reorganization plan, submitted on Tuesday, reveals the parties have reached “substantial agreement on certain key issues.” However, the negotiations between Genesis, its creditors and other stakeholders are far from over. In April, a court-appointed mediator embarked on a 30-day period of attempting to broker a compromise on various disputes, including those involving DCG. This period was later extended.
DCG’s and Three Arrows Capital’s (3AC) claims are both considered “disputed” and “impaired.” This suggests that the parties may not recoup the entire value of their claims. Under the revised plan, DCG claimants will be given the same treatment as other unsecured creditors, but will not receive any proceeds from the outstanding loans DCG owes.
Back in January, DCG admitted to owing Genesis Capital a sizeable sum of $526 million, scheduled to be paid by May 2023. Additionally, DCG owes $1.1 billion under a promissory note due in June 2032.
Crypto exchange FTX and its trading arm Alameda Research find themselves caught up in the bankruptcy fray as well, asserting that Genesis owes them $3.9 billion – a claim that Genesis denies. The updated wind-up plan stipulates that claims related to FTX and Alameda Research should not benefit from any clawbacks of fraudulent transfers.
FTX filed a parallel action on Tuesday, maintaining that its claims against Genesis should be adjudicated as part of the court proceedings in Delaware.
Earlier this month, Judge Sean Lane granted Genesis an extension until August 2 to finalize its bankruptcy plan. Interestingly, Judge Lane appeared somewhat dismissive of the attempts made by both 3AC and FTX to participate in the ongoing mediation.
In conclusion, as the Genesis bankruptcy saga unfolds, it seems that multiple powerful players in the cryptocurrency world are fighting for their share of the company’s assets. With disputes over the amounts owed to various parties still ongoing, we can expect more revelations and challenges to surface before a final resolution is reached.
Source: Coindesk
