Crypto Lender Genesis Global Capital Unveils Amended Chapter 11 Bankruptcy Plan
Genesis Global Capital, a crypto lender, has filed an amended Chapter 11 bankruptcy plan aimed at resolving outstanding creditor claims. The plan, submitted on October 25, 2023, is the result of extensive negotiations involving Genesis, the Official Committee of Unsecured Creditors, crypto exchange Gemini, and the Ad Hoc Group of Genesis Lenders. While substantial progress has been made on key issues, discussions are still underway, and all parties involved are reserving their rights according to the filing.
The amended bankruptcy plan classifies creditor claims against Genesis Global Holdco into 10 distinct classes. Notably, four classes are designated for crypto-denominated unsecured claims, divided by currency. This means that fiat, Bitcoin, Ethereum, and other alternative crypto-denominated unsecured claims would be affected, allowing them to vote on the proposed plan. This differentiation in the treatment of crypto asset claims acknowledges the varying interests of Genesis creditors.
Under the proposed plan, Genesis entities would be wound down by newly established “Wind-Down Debtors,” who would be overseen by a Plan Administrator Officer, a New Board, and a Wind-Down Oversight Committee. These wind-down debtors would oversee the liquidation of assets and the distribution of proceeds to creditors based on agreed-upon principles.
Segregated accounts are planned to be set up to facilitate plan distributions. These accounts would cover claims, professional fees, litigation, and wind-down reserves. Moreover, intercompany claims between Genesis Global Capital and Genesis Asia Pacific are slated to be settled, ensuring equitable creditor recoveries.
The amended plan also outlines significant changes to corporate governance. The existing entity boards would be replaced by the New Board, indicating a shift in leadership structure. The plan also intends to preserve causes of action, potentially allowing for legal pursuits by the Wind-Down Debtors in the future.
One noteworthy component of the plan is the settlement of intercompany claims between Genesis Global Capital and Genesis Global Holdco. This settlement would allocate the proceeds generated from monetizing Genesis trading platform assets to Genesis Global Capital. These assets are a result of the fallout from the bankruptcy case Genesis filed for in November 2022. At that time, the company cited extreme market dislocation and a loss of industry confidence following the collapse of the crypto exchange FTX. This proposed plan aims to resolve Genesis’s bankruptcy in an orderly manner.
The amended Chapter 11 bankruptcy plan filed by Genesis Global Capital signifies a significant step toward addressing the complex issues surrounding cryptocurrency and financial insolvency. As negotiations continue, the crypto community, creditors, and financial regulators are keenly observing the outcome, as it could set important precedents for the industry. The plan, if approved, holds the potential to offer closure and clarity to the Genesis Global Capital bankruptcy saga.
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