![]() To that end, Gemini, the FDG, and the Ad Hoc Group of Creditors (AHG) have all asked the Bankruptcy Court to terminate Genesis’s exclusive right to file and solicit a plan so that Genesis’s legitimate creditors can move forward expeditiously with a plan that has their support. Gemini and other creditors have formed a new group – the Fair Deal Group (FDG) – that is dedicated to bringing immediate value to Genesis’s creditors and pushing for higher and better recoveries to creditors to compensate for DCG’s role in Genesis’s default to them. The time for Genesis to be leading the process has come to an end. Any plan incorporating the deal in principle would merely be a dead end. DCG’s contribution under the deal in principle amounts to significantly less than what DCG currently owes and also fails to capture any consideration in exchange for releasing DCG and Barry Silbert from valuable claims resulting from DCG’s role in harming Genesis’s creditors, outlined in the lawsuit we filed against DCG and Barry Silbert personally in New York court on July 7th (see July 7th Earn update, below). The scant details about the deal in principle shared by Genesis in its public announcement confirms Gemini’s belief that Genesis would go easy on DCG and Barry Silbert, to the direct detriment of Genesis’ creditors, including Earn users. But the “deal” that Genesis has been negotiating for more than seven months has virtually no support among Genesis’s creditors, and there is absolutely no evidence that this “deal” would lead to the 70-90% recoveries to Earn users touted by Genesis, or anywhere close to that. (DCG), and the Unsecured Creditors Committee (UCC), subject to definitive documentation, including continued negotiation over the terms and conditions of an amended chapter 11 plan. The summary: Genesis purports to have reached a “deal in principle” with its parent, Digital Currency Group, Inc. It has been a busy week in the Genesis bankruptcy. Details for attending the hearing will be posted to this page once they are made available. Lastly, the hearing on approval of Genesis’s agreement to allow FTX a $175 million claim was deferred to September 18th at 10am ET to allow the AHG, Gemini, and the FDG to take discovery. Instead, Genesis wasted that time pursuing the “deal in principle” that does not have the support of its creditors. ![]() We have also written letters in early July to both the Genesis Special Committee and the UCC, asking that they exercise their fiduciary responsibilities and begin these proceedings. The fact that Genesis would immediately stay these lawsuits - which are a complete slam dunk - further confirms our belief that Genesis is going easy on DCG.īy way of background, Gemini has spent the last two months demanding that this turnover proceeding be commenced, including in its open letter on J(see July 7th Earn update, below). Shortly after filing these complaints, Genesis announced that it would stay its pursuit of them while it negotiates its dead-end “agreement in principle” with DCG. (DCGI), which can be reviewed here and here respectively, seeking payment of the more than $600 million of loans that DCG and DCGI have owed to Genesis (and its creditors) since May 2023. ![]() (DCG) and DCG International Investments Ltd. Minutes before the hearing, Genesis finally commenced adversary turnover proceedings against its parent company Digital Currency Group Inc. In addition, it was universally recognized among the parties that the current deal lacks creditor support: counsel for the Unsecured Creditor Committee (UCC) stated that the deal would need to be improved and counsel for Genesis described the deal as “imperfect” and that they did want not try to “cram down” a deal. ![]() Judge Lane also stressed the need for urgency and that time is not on anyone’s side. This is an improvement over the 60-day extension that Genesis requested, and the hearing was a good opportunity for Judge Lane to hear Genesis’s creditors’ dissatisfaction with the DCG “agreement in principle” announced last week. Following a lengthy hearing on Genesis’s exclusivity motion on September 6th, Judge Lane granted Genesis a 30-day extension of its exclusive period to file and solicit a plan of reorganization, over the objections of Gemini, the Ad Hoc Group of Creditors (AHG), and the Fair Deal Group (FDG). It was another busy week in the Genesis bankruptcy.
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