By Bitcoinist - 7 months ago - Reading Time: 2 minutes
Genesis Global And DCG Strike Crucial Deal With Creditors: 90% Recovery Imminent?
The latest update for the financial complications faced by Genesis Global, a notable name in the crypto lending space, and its parent company, Digital Currency Group (DCG), shows that both entities seem to have navigated their way out of the murky waters, striking an agreement with their creditors.
The Path To Recovery For Creditors
As revealed through recent court filings, the agreement marks a turning point that could ensure stakeholders have a fair shot at recovering their investments. Genesis Global and Digital Currency Group’s recent announcement signals hope for numerous creditors.
According to the documents filed in the U.S. bankruptcy court in the Southern District Of New York, unsecured creditors stand to recover a substantial portion of their claims.
The projected recovery rate oscillates between 70% to 90% for those holding claims in US dollars. Moreover, a recovery ranging from 65% to 90% is anticipated for those whose claims are rooted in specific digital assets.
Delving into the monetary specifics, the agreement encompasses the settlement of approximately $630 million in unsecured loans, with a due date set for May 2023. Furthermore, a roughly $1.1 billion unsecured promissory note, which is expected in 2032, is also covered under this deal.
DCG’s Position And Broader Implications
DCG’s response to the entire episode is relief and forward-looking optimism. In a statement issued to Reuters, DCG expressed its satisfaction, stating:
DCG is pleased to reach an agreement in principle with Genesis and the Unsecured Creditors Committee, which will provide a framework for a comprehensive resolution of the claims in the Genesis Chapter 11 cases and a pathway to significant recovery for creditors.
It’s important to recall that Genesis’ financial woes surfaced in January, leading them to file for bankruptcy. At the time, the firm’s liabilities to creditors were roughly $3.4 billion.
However, by February, a ray of hope emerged as Genesis, with the support of DCG and primary creditors (notably including Gemini), agreed in principle to a restructuring plan.
In related news, DCG, under the leadership of CEO Barry Silbert, is actively seeking to quash a lawsuit initiated by their former collaborator, the crypto platform Gemini. This legal conflict, which began in early 2023, centers around the “Earn Program” debacle that ended with Genesis.
In a submission to the US Southern District of New York, both Silbert and DCG have petitioned Judge Lewis Liman to consider dismissing the lawsuit, invoking the Federal Rules of Civil Procedure.
As reported by Bitcoinist, citing Bloomberg, Silbert and his cryptocurrency enterprise assert that Gemini has not provided substantial evidence to back their fraud allegations. In addition, Silbert has expressed concerns over what he perceives as attempts by the Winklevoss twins, Cameron and Tyler, to tarnish his reputation.
Genesis, which went under, had previously collaborated with Gemini to fortify its “Earn Program,” enabling users to gain returns on their digital assets. The controversy erupted when users could not access their funds following the company’s bankruptcy, prompting legal action against Gemini.
Featured image from Unsplash, Chart From TradingView
Original source: Bitcoinist