Genesis Petitions for Mediator After Creditors Back Out of Restructuring Plan
DCG says that the creditors who reneged on the previous deal “raised all new demands”
Artwork by Axel Rangel
Genesis Global filed a motion asking the courts to supply a mediator after some creditors backed out of the bankrupt crypto lender’s restructuring plans.
In a tweet, DCG — the parent company of Genesis — said that the creditors “have reneged and raised all new demands.”
The mediation filing requests a sitting bankruptcy judge to mediate to “resolve and narrow the open issues” in order to “avoid additional cost and delay” that could arise.
In February, Genesis announced that it had reached a deal in principle with its biggest creditors and parent company Digital Currency Group. The deal had been awaiting court approvals.
According to the press release, the deal would have DCG ”exchange its existing $1.1 billion note due in 2032 for convertible preferred stock to be issued by DCG as part of Genesis’s Chapter 11 plan.”
“DCG would also refinance its existing 2023 term loans through a new, junior secured term loan in two tranches made payable to creditors in the aggregate total value of approximately $500 million,” it continued.
In addition to the mediation motion filed by Genesis–which originally requested a hearing on or around May 9 — the lender also filed to shorten the notice period and requested an April 26 hearing.
This would also allow creditors to file an objection before April 26.
The company filed for bankruptcy in January, two months after it halted customer withdrawals.
Genesis owes around $3.5 billion to its top 50 creditors, including Gemini — the exchange co-created by the Winklevoss twins.
In January, a day after the exchange filed for bankruptcy, Cameron Winklevoss threatened to “take direct legal action” against DCG and its CEO, Barry Silbert
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