Summary: Genesis Global Capital Granted Court Approval to Distribute Billions in Digital Assets and Cash
Genesis Global Capital has obtained court approval to distribute significant amounts of digital assets and cash to creditors. The decision by Judge Sean Lane overrides objections raised by its parent company, Digital Currency Group (DCG), enabling the return of customer assets that have been frozen since November 2022.
Genesis Chapter 11 Repayment Plan Confirmation
After over a year of filing for bankruptcy, Genesis Global Capital has finally received judicial approval for its Chapter 11 repayment plan. On May 17th, Judge Sean Lane granted his approval and signed off on the unique structure designed to repay Bitcoin and other cryptocurrencies to creditors. The plan received substantial support from Genesis’ creditors and customers of the Gemini Earn program, a joint initiative with Gemini Trust Co., founded by the Winklevoss brothers.
Opposition from Parent Company
- Digital Currency Group (DCG) contested the repayment plan, claiming that the increase in crypto prices should not benefit creditors at its expense.
- DCG argued that creditor claims should be based on cryptocurrency prices at the time of Genesis’ bankruptcy filing in early 2023.
- Genesis’ attorney dismissed the notion, stating that claims should not be capped at the petition date value.
- Judge Lane rejected DCG’s objection, stating that the parent company lacks the legal right to challenge Genesis’ Chapter 11 plan.
Settlements for Gemini Earn Program
- Judge Lane also approved a settlement with New York Attorney General Letitia James, resolving a lawsuit against Genesis’ Gemini Earn program.
- The settlement ensures that former Gemini Earn customers will receive assets owed to them, redirecting them to their wallets, potentially owed to state authorities.
- An earlier settlement with the US Securities and Exchange Commission related to the Gemini Earn program was also confirmed, closing another legal challenge for Genesis.
All in All..
The court’s decision to approve Genesis’ Chapter 11 plan paves the way for the distribution of around $3 billion in cash and cryptocurrency to creditors and customers of the Gemini Earn program. Digital Currency Group remains in a subordinate position to Genesis’ creditors as they navigate through the bankruptcy.
Hot Take: Genesis Global Capital’s Court Approval Marks a Significant Turnaround
With the recent court approval for the distribution of assets to creditors, Genesis Global Capital is set to make significant progress in resolving its bankruptcy proceedings. While facing challenges from its parent company DCG, Genesis has successfully navigated legal obstacles to provide relief to its creditors and Gemini Earn program customers. The approval signals a positive development for the failed company and its stakeholders as they move towards resolution and recovery.
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