- Judge Sean Lane gave Genesis the go light for their Chapter 11 repayment plan.
- Genesis may now unfreeze and refund client funds that have been held since November 2022.
The bankruptcy court has given the go-ahead for Genesis Global, a cryptocurrency lender, to repay its creditors with over $3 billion worth of cash and crypto. Digital Currency Group (DCG), the parent firm, will not be able to recover from its bankruptcy as a result of this ruling.
On May 17, Judge Sean Lane gave Genesis the go light for their Chapter 11 repayment plan. With this decision in hand, Genesis may now unfreeze and refund client funds that have been held since the business stopped processing withdrawals in November 2022, when several big cryptocurrency companies went down.
DCG’s Appeal Rejected
In contrast, Lane rejected DCG’s contention that Genesis owes its creditors and consumers no more than the market value of the cryptocurrency assets that were held by Genesis at the time of its bankruptcy filing in January 2023. Between then and May 17, the price of Bitcoin (BTC) jumped dramatically, from around $24,000 to over $66,700.
In a 135-page decision, Lane rejected DCG’s legal appeal, explaining that Genesis’ parent company did not have the right to dispute the Chapter 11 plan. In the context of Genesis’s Chapter 11 repayment structure, DCG’s standing as a shareholder is junior. Creditor claims, rather than DCG’s equity share, are eating away at Genesis’ distribution money, according to Lane.
Lane estimated that DCG’s equity stake was worthless and left with a deficit of several billion dollars as a result of the massive demands from creditors. After ignoring DCG’s protest, he determined that Genesis must pay out its other creditors—including federal and state financial regulators—with claims totaling $32 billion before it can distribute any money to its equity owner, DCG. This applies even with capped consumer claims.
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Source: https://thenewscrypto.com/court-approves-defunct-genesis-globals-3-billion-repayment-plan/