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Crypto conglomerate digital currency group (dcg) and its subsidiaries Genesis in bankruptcy has entered into an agreement in principle on the terms of a restructuring plan with a group of the company's main creditors, in the opinion of someone who knows the situation well.
The agreement, which is beginning to address some of the major problems that led to chapter 11 of bankruptcy protection, is to liquidate the Genesis loan portfolio and sell the Genesis entities in bankruptcy, the individual said.
The term sheet also involves refinancing outstanding loans where dcg borrowed $500 million in cash and approximately $100 million worth of Bitcoin (BTC) genesis, the individual said. Included is "a riding of the infamous 10-year promissory note that dcg gave birth in exchange for claims 3ac coverage fund failed," the person said, Do not provide process details. The promissory note was $1.1 billion with three capital arrows (3ac), a crypto speculative fund which collapsed last year.
The creditor group negotiates receivables of approximately $2.4 billion against the crypto lender on behalf of companies and individuals. The group is represented by law firms proskauer and kirkland as well as swellihan lokey bank restructuring.
The proposed agreement will now be offered to other creditors, including hundreds of thousands of gemini customers winning loan product, the individual said.
The lending arm of Genesis halted withdrawals on Nov. 16, 2022, in the wake of crypto exchange FTX’s collapse earlier that month. Last month, Genesis‘ lending businesses filed for bankruptcy protection in New York.
On Jan. 23, Genesis’ lawyers told Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York at a hearing they foresaw reaching a deal with creditors by the end of that week.
Genesis refused to speculate. Dcg failed to reply to requests for comments at the time of the press.
Dcg also owns coindesk.
CORRECTION (Feb. 6, 2023 17:55 UTC): The Genesis bankruptcy filing was Jan. 20, not last week.
