Genesis Creditors Allegedly ‘Walk Away’ From Previously Agreed Bankruptcy Restructuring Plan

Digital Currency Group (DCG) has alleged that a group of Genesis Capital’s creditors “backtracked and filed” new orders more than two months after agreeing to a comprehensive settlement.

The bankruptcy case appears to be on its way to resolution, but the latest rejection is expected to lengthen the court process, according to the Barry Silbert-led crypto conglomerate.

Genesis Traffic Brokerage

Genesis is among the slew of crypto companies that have taken a hit in the market last year, along with competitors like Celsius Network and Vault. The subsequent bankruptcy filing by Sam Bankman-Fried’s FTX was the last straw for Genesis, which was soon destabilized by a series of redemption requests. The company filed for bankruptcy shortly after its lending arm stopped taking withdrawals.

The company stated in its bankruptcy filing that it owed $2.4 billion to its main creditors out of nearly $3.4 billion in liabilities. Its major creditors and parent company have approved a preliminary restructuring plan.

DCG statement is reading,

“More than two months after all parties agreed to a comprehensive settlement that Genesis Capital submitted to the Bankruptcy Court, a group of Genesis Capital creditors have retracted and filed all new claims. We do not know if hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will lengthen the proceedings court.”

The now bankrupt cryptocurrency lender Pursuit A mediator to assist the parties involved in reaching a resolution where the DCG deal had become deadlocked. A new court filing says the debtors believe “mediation should be scheduled immediately” because “DCG owes GGC approximately $630 million under certain term loans due during the second week of May.”

Deal

As I mentioned Potato encryptionGenesis and its parent company, DCG, have reached an agreement detailing the closing of the company’s prior loan book and the sale of its bankrupt entities.

He also stated that DCG will be tasked with refinancing its term loans for 2023 with a new small secured term loan in two tranches to be paid to creditors with an aggregate aggregate value of approximately $500 million.