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The first hearing in the bankruptcy of Genesis Capital will take place on January 23 at 14:00 (Eastern Time), according to court documents. Justice Sean h. lane of the U.S. Bankruptcy Tribunal for the South District of New York will hear the case.
On the basis of Article 11, known as a restructure chapter, corporations may propose a restructuring plan to creditors, while still authorized to carry on its activities, said co-telegraph mark pfeiffer, insolvent lawyer at buchanan ingersoll law firm.
As a first stage of insolvency proceedings, the tribunal will decide whether or not to accept the chapter 11 relief sought by genesis global holdco and two of its loan subsidiaries, World Capital Genesis and Asia-Pacific Genesis - collectively known as Capital Genesis. A common case administration has also been requested by corporations.
An unsecured creditors committee will also be appointed by the U.S. trustee in proceedings. The committee will have the right to request that corporations be consulted prior to making any significant decisions or changes and to participate in the restructuring plan. Twenty of the largest unsecured creditors are usually selected for the committee, court filings reveal.
Related: Gemini and Genesis’ legal troubles stand to shake up industry further
With liabilities up to $10 billion, the companies filed for bankruptcy protection on Jan. 19, more than two months after disclosing a $175 million exposure to FTX, along with liquidity issues caused by the crypto exchange collapse. Withdrawals have been suspended from Genesis Global Capital's platform since Nov. 16 2022.
Background The chapter 11 plan calls for a comprehensive settlement of all claims through, and the establishment of a trust that will distribute assets to creditors, according to a news release. As part of a "two-way process", companies will pursue the "sale, raising of capital, and/or a equitation transaction" that would seemingly allow his company "to emerge under a new property."
Genesis Capital’s parent company, Digital Currency Group (DCG), recently denied involvement in the bankruptcy filing, claiming that a special committee of independent directors recommended and decided to file for Chapter 11 bankruptcy protection. Only the granting entities of Genesis have declared bankruptcy. Genesis Global Trading and Genesis Cash and Derivatives will continue to operate.
