After an extensively debated legal issue between Genesis and its creditors, Digital Currency Group (DCG), owners of Genesis, has attained a preliminary agreement with Genesis creditors to settle the claims arising from Genesis’ bankruptcy.
Details of the plan reveal that the recoveries could reach 70%-90% in USD equivalent for unsecured creditors and 65%-90% recovery on an in-kind basis depending on the denomination of the digital asset.
In addition, the filing notes that all the estimated recoveries are subject to market pricing and definitive documentation.
Digital Currency Group (DCG) is a company within the cryptocurrency industry that operates as a venture capital firm and holds a significant presence in the crypto space.
DCG is known for investing in various blockchain and cryptocurrency-related startups, projects, and initiatives.
Genesis is a tech company operating in the cryptocurrency space. It specializes in providing lending and trading services within the digital asset realm.
Genesis enables individuals and institutions to access loans using their cryptocurrency holdings as collateral. Additionally, the company facilitates trading and borrowing of various cryptocurrencies.
After the collapse of FTX in November when it filed for bankruptcy, Genesis was one of the crypto firms that was affected.
Two months later, Genesis filed for bankruptcy as it couldn’t meet financial obligations to its customers.
Since then, there have been court cases on how to settle all its creditors’ money it owes them.
In July, there was a dispute between FTX and Genesis involving $2 billion which a US Court Judge says might affect the payout plan for Genesis creditors.
The DGC-owned company asked the Judge to give it more time to resolve the matter which should enable it to pay off its creditors.
According to Reuters, in order to save the day for Genesis, its parent company, DGC, said that it is close to resolving the matter with an in-principle agreement with Genesis and its Unsecured Creditors Committee.
It added that the agreement will be filed at the bankruptcy court for approval proceeding to implementation.
Furthermore, to pay back the money owed to creditors, including $630 million that was due in May 2023 and $1.1 billion that will be due by 2032, DCG will take on new loans and make a partial repayment.
These loans include one for $328.8 million that needs to be repaid in two years and another for $830 million that needs to be repaid in seven years.
Finally, the filing states that DGC is also anticipated to make large payments totaling $275 million in installments before the plan’s effective date as stated in the partial repayment agreement.