Crypto News– Digital Currency Group (DCG), the parent company of Genesis Capital, the crypto lender currently undergoing bankruptcy proceedings, has raised objections against Genesis’ proposed bankruptcy plan, citing violations of the Bankruptcy Code.
Genesis Bankruptcy Scheme Overpays Claims to Customers
In a motion filed on February 5th, DCG contends that Genesis’ plan unlawfully offers its customers more than what they are legally entitled to receive. The court document states that DCG would endorse a plan that ensures creditors receive full repayment, emphasizing that the current assets of the estates are adequate to fulfill this obligation. However, Genesis has not put forth such a proposal.
Instead, Genesis, along with its unsecured creditors and lenders, has crafted what DCG describes as a “cramdown plan” that excessively compensates unsecured creditors, surpassing the amount of their claims at the time of filing by hundreds of millions of dollars.
DCG argues that this plan unfairly benefits a select group of creditors while disadvantaging others, a move it deems contradictory to the principles outlined in the Bankruptcy Code. Furthermore, DCG asserts that the proposed plan deprives it of significant economic and corporate governance rights, indicating a lack of good faith on the part of the debtors.
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