Mediation between bankrupt cryptocurrency lender Genesis Global Holdco and its creditors is expected to conclude by August 16. However, there is still uncertainty regarding whether a deal will be reached. During a hearing before US Bankruptcy Judge Sean Lane, the company’s lawyer Sean O’Neal stated that the mediation period would not be extended if significant progress towards a deal is not made within the next two weeks.
O’Neal reportedly said, “If we do not make substantial progress with respect to a deal in principle in the next two weeks, we do not believe that we will be seeking to extend the mediation further.” Since May, Genesis has been engaged in discussions with key stakeholders, such as parent company Digital Currency Group and Gemini Trust, in an effort to create a proposed bankruptcy exit plan supported by DCG.
Despite the rejection of the plan by Genesis’ official committee of unsecured creditors, Genesis and other key stakeholders are still advocating for its implementation. If an agreement is not reached by August 16, the crypto lender will proceed with its existing bankruptcy plan, albeit with certain amendments.
The mediation process represents one of the final steps for Genesis in emerging from bankruptcy. “At a certain point, we need to move forward,” O’Neal emphasized.
Related Post
In a separate development, bankrupt crypto exchange FTX and now-defunct crypto lender Genesis have reached an agreement to settle their disputes within their bankruptcy cases. This agreement was disclosed in a letter submitted by their legal representatives to the US bankruptcy court for the Southern District of New York.
“The Parties have reached an agreement in principle, subject to documentation, regarding a settlement that would resolve, among other things, the claims asserted by the FTX Debtors against the Debtors in these Chapter 11 Cases and the claims asserted by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases,” the letter stated.
Following its bankruptcy, Genesis emerged as the largest unsecured creditor of FTX. According to court documents filed in January, FTX owed Genesis $226 million. FTX, on the other hand, claimed that Genesis Global owed it $3.9 billion, although this amount was later reduced to $2 billion.
Digital Currency Group (DCG), the crypto conglomerate led by Barry Silbert, has recently claimed to have made progress in settling the claims of its bankrupt subsidiary Genesis. In its second-quarter shareholder letter, DCG announced that it had engaged in extensive negotiations to resolve the claims in the Genesis Capital Chapter 11 cases.
The letter included the statement, “After months of tireless negotiations led by DCG leadership, we are close to reaching an agreement in principle to resolve the claims in the Genesis Capital Chapter 11 cases.”
Overall, while the mediation between Genesis Global Holdco and its creditors is set to conclude soon, the outcome is still uncertain. The bankruptcy cases involving FTX and Genesis also appear to be progressing towards a settlement. These developments mark important steps in the efforts to resolve the financial issues faced by both companies and emerge from bankruptcy.
