Digital Currency Group (DCG) reaches agreement with Genesis Global’s creditors
Digital Currency Group (DCG) has reached an in-principle agreement with Genesis Global’s creditors to resolve the claims that emerged during the crypto lender’s bankruptcy. This agreement could potentially lead to resolving outstanding issues and achieving a fair recovery for creditors. Here are the key points:
– Genesis Global filed for Chapter 11 bankruptcy in January 2023 and owed over $3.5 billion to its top 50 creditors.
– The agreement could result in unsecured creditors seeing a recovery ranging from 70% to 90% in U.S. dollar equivalent.
– The recovery on an in-kind basis is projected to range between 65% and 90%.
– DCG’s existing liabilities of approximately $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured promissory note due in 2032 will be resolved.
– The repayment will be conducted in two tranches, with an initial repayment of around $328.8 million and a subsequent repayment of $830 million.
Stumbling blocks remain
Despite the agreement, both Gemini and the Ad Hoc Group of Genesis’ lenders do not support the deal. Constructive discussions are ongoing, but there is no assurance that all parties will reach a fully consensual plan. Notably, last month, the Winklevoss twins filed a lawsuit against DCG and its CEO Barry Silbert, accusing them of fraud.
Hot Take: DCG’s agreement brings hope for creditors, but challenges persist
While the agreement between DCG and Genesis Global’s creditors is a positive step towards resolving the bankruptcy issues, the lack of support from Gemini and the ongoing legal disputes indicate that challenges still remain. It remains to be seen if all parties involved can reach a fully consensual plan and provide a fair recovery for the creditors.
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