Creditors with $2.4 billion in claims against the bankrupt crypto lender could scupper an agreement made after months of wrangling.
Crypto lender Genesis' bankruptcy case has been held up for months by disputes over loans from parent company DCG.A tentative deal struck between defunct lender Genesis Global Capital and parent company Digital Currency Group faces opposition from a group of creditors who described in aGenesis' lending arm GGC
after a double whammy from the collapse of hedge fund Three Arrows Capital and crypto exchange FTX. The wind-up has been delayed for months by talks over the contribution that DCG should make.saw DCG – which is also CoinDesk’s parent company – agreeing to a series of partial repayments to satisfy liabilities of $630 million in unsecured loans due in May 2023 and $1.1 billion due in 2032.
The lenders took exception to DCG and CEO Silbert being released from future legal claims, and threatened to block any final bankruptcy deal that incorporated the plans. The filing accused Genesis and a formal committee that represents creditors of neglecting their fiduciary duty to maximize recoveries by agreeing to the DCG deal. Membership of the ad hoc lenders’ grouping has not been made public, but the filing says they have a combined $2.4 billion in claims against GGC, including a majority of each class of claims asserted against it.
In the Tuesday filing that announced the deal, Genesis said it could result in recoveries of 70%-90% for unsecured creditors, and said that “constructive discussions” were ongoing with the lenders’ grouping.Edited by
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