DCG Reaches In-Principle Agreement in Genesis Bankruptcy Case, Aims for Creditor Recoveries
Crypto News – Digital Currency Group (DCG) has reportedly come to an initial agreement with Genesis creditors in resolving the claims arising from Genesis bankruptcy. This development was disclosed in a court filing on Tuesday.
The proposed plan could potentially lead to recoveries ranging from 70% to 90% in terms of USD equivalent for unsecured creditors, while recovery percentages of 65% to 90% would apply for in-kind recoveries, depending on the specific digital asset denomination. It’s important to note that these projected recoveries are contingent upon market pricing and the finalization of official documentation.
Genesis’ lending arm suspended withdrawals in November of the prior year due to the aftermath of FTX’s collapse, subsequently seeking bankruptcy protection at the beginning of 2023. DCG, the parent company of CoinDesk, had previously communicated to shareholders that it was in the final stages of reaching a preliminary agreement to address the claims.
DCG’s existing obligations, which amount to around $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured promissory note set to mature in 2032, are expected to be fulfilled through a newly established partial repayment arrangement. This repayment structure involves two tranches: approximately $328.8 million with a two-year maturity, and $830 million with a seven-year maturity.
Additionally, DCG intends to make four separate installments totaling $275 million subsequent to the partial repayment agreement date, in relation to the May 2023 maturities.
Genesis Global Holdco, LLC, along with its subsidiaries, had filed for bankruptcy with the U.S. Bankruptcy Court for the Southern District of New York in January 2023. The bankruptcy filings had revealed that Genesis was indebted to its top 50 creditors for a cumulative sum exceeding $3.5 billion. Noteworthy creditors included prominent names in the crypto space such as Gemini crypto exchange, trading powerhouse Cumberland, Mirana, MoonAlpha Finance, and VanEck’s New Finance Income Fund.
1 Comment