The intricate tango between the bankrupt cryptocurrency loan provider, Genesis Global Holdco, and its creditors is nearing its endpoint with the set date of August 16, yet a hint of uncertainty hangs over a conclusive deal. This ambiguity was articulated by the company’s lawyer, Sean O’Neal, during a hearing before US Bankruptcy Judge Sean Lane, when he added that no further extensions to the mediation period would be sought unless significant strides towards a deal are made within a fortnight.
Since May, Genesis has found itself in negotiation sessions with key stakeholders, such as its parent company Digital Currency Group and Gemini Trust, in a journey to forge a consensus over a proposed bankruptcy exit plan supported by DCG. Despite the official committee of unsecured creditors of Genesis dismissing the plan, Genesis and other stakeholders continue lobbying for it.
However, the clock ticks towards August 16, and the tension increases. If no agreement surfaces by then, Genesis will have to follow its existing bankruptcy plan, with some tweaks as O’Neal pointed out to the court. The scenario is a sure reminder that “at a certain point, we need to move forward,” as O’Neal stated.
In parallel to this development, a recent accord to settle disputes within their bankruptcy cases has been reported between the similarly bankrupt crypto exchange, FTX, and Genesis. The reached agreement was disclosed in a letter submitted by their legal representatives to the US bankruptcy court. The agreement seeks to resolve the large claims asserted against each other in the FTX and Genesis Chapter 11 cases.
Court documents exposed in January showed FTX owing Genesis a whopping $226 million, making Genesis the largest unsecured creditor of FTX. However, FTX contested by claiming that Genesis Global owed $3.9 billion to them, a figure that was later minimized to $2 billion.
There seems to be a glimmer of hope though, as the DCG, the crypto conglomerate spearheaded by Barry Silbert, revealed that significant strides had been made towards addressing the claims of its bankrupt subsidiary Genesis. The optimism was evident in its second-quarter shareholder letter, confirming that it was on the verge of a principal agreement to resolve the claims in the Genesis Capital Chapter 11 cases, after months of strenuous negotiations. However, as with most tales involving complex financial twists and settlements, the final act remains to be seen.
Source: Cryptonews
