Genesis settlement disrupted by new creditor demands, DCG says
Troubled digital currency company Genesis Capital saw its settlement disrupted by creditors in two months after the initial agreement, raising concerns about the timing of the process.
Genesis’ parent company, Digital Currency Group (DCG), took to Twitter on April 25 to issue a statement on Genesis filing a motion for mediation. The firm said that Genesis’ settlement could be troubled due to renewed demands from creditors.
DCG Statement on Genesis filing Motion for Mediation: pic.twitter.com/pRluUnL49C
In February, Genesis Capital submitted a comprehensive settlement to the bankruptcy court after reaching an “agreement in principle” with DCG and its creditors. Under the proposed restructuring plan, Genesis creditors eUnder the initial settlement plan, Genesis creditors were expected to receive 80% recovery of funds lost due to the bankruptcy.xpected 80% recovery of funds lost due to the firm’s collapsed operations.
A few months later, Genesis creditors eventually raised their demands, significantly disrupting the ongoing court process, according to DCG.
“While it is difficult to understand the rationale given the limited engagement from Genesis creditors since the February court filing, our understanding is that a subset of creditors have decided to walk away from the prior agreement,” DCG wrote.
DCG noted that it remains committed to reaching a fair settlement deal for all and will have to take into account any new demands against previous concessions. The firm stated:
As previously reported, Genesis filed for Chapter 11 bankruptcy in the Southern District of New York in January 2023. In the filing, the company estimated liabilities of $1 billion to $10 billion and assets in the same range.
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