On February 6, Genesis announced that it had come up with a global solution that would “maximize value” for all Genesis customers and stakeholders.
The agreement in principle is with parent company DCG and groups of creditors who collectively own or represent more than $2 billion in asserted claims.
In early January, Genesis laid off nearly a third of its staff because it was considering filing for bankruptcy. On January 20, the cryptocurrency lender initiated a Chapter 11 filing.
According to the advertisement:
According to the terms of the agreement, DCG will exchange its existing $1.1 billion notes due 2032 for convertible preferred stock that DCG will issue as part of Genesis’ Chapter 11 plan.
Genesis moves on
DCG will also refinance its existing loans for 2023. These loans will be governed by a two-tranche “New Starter Loan” payable to creditors totaling approximately $500 million.
DCG also intends to sell Genesis’ cryptocurrency trading business as well as its lending arm, which is restructuring through bankruptcy.
Special Committee member Paul Aronzon commented to Special Committee board member,
Today’s agreement is a positive step forward and provides a clear path to a compromise solution that increases value.
The committee has been at the forefront of the company’s restructuring work.
Genesis attorney Sean O’Neill said DCG will also contribute its stake in Genesis Global Trading (GGT) to Genesis Global Holdco, which will put all Genesis entities under the same holding company. he added:
“In the meantime, during these cases, we’ll really be marketing and trying to sell not only the debtors’ assets but also the GGTs because they make a nice package, and we think that by putting them together we can maximize the recovery of the estate.”
Reportedly, Genesis Global Capital owes at least $3.4 billion to at least 100,000 creditors.
In addition, cryptocurrency exchange Gemini has also reached an agreement with Genesis and other creditors with a “scheme that provides a winning path for users to redeem their assets,” co-founder Cameron Winklevoss reported.
1/day, @twin has reached a preliminary agreement with Genesis Global Capital, LLC (Genesis), @tweet, and other creditors on a plan that provides a path to win over users to recover their assets. This agreement was declared in bankruptcy court today.
– Cameron Winklevoss (@cameron) February 6, 2023
In addition, Gemini has agreed to contribute up to $100 million in additional money to earn users as part of the plan.
Gemini lent money to Genesis and had up to $900 million in closed customer deposits with the crypto lender.
Crypto Lender Genesis has reached a preliminary agreement with DCG and creditors for the first time on CryptoPotato.