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A lawyer for bankruptcy crypto loan company genesis is optimistic the company can resolve its creditors litigation as early as this week and it could be out of chapter 11 by the end of May.
Genesis counsel, Sean O'Neal, provided the comments in January. 23 initial hearing at the United States Bankruptcy Court for the Southern District of New York, according to a Reuters report.
He added Genesis had "some measure of confidence" it would resolve disputes with creditors by the end of the week and, if needed, would look for the judge to install a mediator, but said:
"Sitting here right now, I don't think we're going to need a mediator. I'm very much an optimist."
Genesis filed for Chapter 11 bankruptcy on Jan. 19. At the time, he already had a restructuring plan as well as a way to "sell, capital raise, and/or a riding operation" so that it might "arise under a new property."
The bankruptcy comes almost two months after the suspended withdrawals from Genesis in November 2022 citing the market turbulence brought about by the FTX crypto swap bankruptcy.
A series of "first day" motions, standard in bankruptcy proceedings, were granted by Judge Sean Lane to Genesis which included making it possible for the company to pay employees and suppliers.
Lane added genesis did not need to reveal the names of clients on its list of creditors, citing concerns regarding confidentiality. Lane even suggested to the lender to caution users against potential phishing scams if the names are subsequently made public.
Genesis has stated that it will be auctioning off its assets with a plan to get out of bankruptcy in just under four months on May 19.
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It reported having just over $5 billion in assets and liabilities and owes over 100,000 creditors at least $3.4 billion. Genesis’ withdrawal suspension last year impacted users of a yield-bearing product it managed called “Earn” from the Gemini exchange.
Gemini is the biggest creditor of the genesis and owes close to 766 million dollars.
His principal debtor was his parent business, Digital Money Cluster (dcg), This includes $575 million in loans due in May and a $1.1 promissory note due in 10 years.
Even though DCG is facing its own financial troubles — the bankruptcy did not include DCG. As well, Genesis entities that process derivatives, cash transactions, brokerage and custody transactions are not part of the process and continue to operate under Genesis.
