Creditors Could Scupper Deal in Bankrupt Crypto Lender Genesis Global Capital
A tentative deal between Genesis Global Capital (GGC) and parent company Digital Currency Group (DCG) is facing opposition from creditors who believe the treatment of outstanding loans is insufficient.
- Genesis’ lending arm GGC filed for bankruptcy in January after the collapse of Three Arrows Capital and FTX.
- DCG has agreed to partial repayments to satisfy $630 million in unsecured loans due in 2023 and $1.1 billion due in 2032.
- A group of Genesis lenders are unhappy with DCG’s contribution and threatened to block the bankruptcy deal.
- They accused Genesis and the creditor committee of neglecting their duty to maximize recoveries by agreeing to the DCG deal.
- Genesis claims that the deal could result in recoveries of 70%-90% for unsecured creditors.
Genesis and DCG have not yet responded to requests for comment.
Hot Take:
The tentative deal between Genesis Global Capital and Digital Currency Group is facing resistance from creditors who believe the treatment of outstanding loans is insufficient. This opposition could potentially scupper the agreement, putting the bankruptcy proceedings in jeopardy. The lenders are unhappy with DCG’s contribution and have threatened to block the deal. It remains to be seen how this situation will unfold and what impact it will have on the bankruptcy process.
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