Multiple Genesis Capital creditors walk away from agreement – DCG responds
Genesis Capital wants a sitting bankruptcy judge in the Southern District of New York to act as a mediator in its disputes.
A group of unnamed Genesis Capital creditors have raised new demands and walked away from their previous agreement with the bankrupt crypto firm.
Genesis Capital wants the court to appoint a mediator
In an April 24 court filing, the bankrupt crypto lender applied for appointing a sitting bankruptcy judge in the Southern District of New York to act as a mediator in its disputes against its creditors, including the crypto exchange Gemini.
According to the filing, the mediator “is necessary to assist the Mediation Parties in reaching a resolution of one of the most important issues in these Chapter 11 proceedings: the amount, form, timing and other terms and conditions of Digital Currency Group’s (DCG) contribution to the Debtors’ reorganization plan.”
“By seeking the benefit of mediation, the Debtors hope to resolve and narrow the open issues that may otherwise need to be adjudicated in these Chapter 11 Cases and, in so doing, avoid additional costs and delay that could result from such litigation.”
Meanwhile, Genesis stated that its parent company owes it $630 million, due during the second week of May.
In an April 25 statement, DCG pointed out that some unnamed Genesis Capital creditors had reneged on the earlier settlements reached by the bankrupt firm.
“While it is difficult to understand the rationale given the limited engagement from Genesis creditors since the February court filing, our understanding is that a subset of creditors have decided to walk away from the prior agreement. We do not know if the hundreds of thousands of individual creditors are aware of this development, but the latest maneuver will prolong the court process.”
The firm added that it remains committed to reaching a fair outcome for all its creditors. However, it said it would weigh any new demands against the previous concessions.