Genesis has struck a deal with its parent company, Digital Currency Group (DCG), which might finally end the longstanding legal feud between the two.
Repayment Deal Struck
In a recent bankruptcy filing submitted on November 28 to the United States Bankruptcy Court for the Southern District of New York, Digital Currency Group (DCG) and Genesis Global (GGC) have outlined a repayment plan in an attempt to resolve their ongoing legal dispute. The focal point of the litigation involves Genesis seeking to reclaim $620 million in repayments from its parent company, DCG.
The filing discloses that, under the proposed agreement, DCG is committed to settling its outstanding $324.5 million in loans by April 2024. Genesis, in turn, retains the right to pursue any unpaid amounts beyond that deadline.
If successfully executed, this plan could mark the conclusion of the lawsuit initiated by Genesis against DCG in September 2023. The initial lawsuit sought repayment, including interest and fees, for the outstanding loan amount.
Details Of The Deal
Despite some payments made by DCG since the lawsuit, nearly half of the $620 million loan remains unpaid. As of now, DCG has repaid approximately $227.3 million of its total debt.
The proposed deal outlines that DCG will make an additional payment of $275 million to Genesis in three installments, with partial payments in both U.S. dollars and Bitcoin. These payments are slated to be completed by April.
Additionally, DCG is set to make a $35 million upfront payment, along with a $10 million holdback from the recent CoinDesk sale. The filing also mentions that DCG is using Grayscale Trust shares as security.
Preventing Prolonged Litigation
While the deal will not entirely clear DCG’s debt, given the outstanding amount of $324.5 million, it serves the purpose of keeping both companies away from protracted and costly legal battles. An excerpt from the filing highlights this objective, stating,
“The terms of the Partial Repayment Agreement, as amended, will provide immediate significant and near-term benefits to GGC and its creditors, without the risk, expense, and diversion of resources that would be required by litigation of the Turnover Actions.”
Next Steps
The proposed agreement is integral to Genesis’ broader plans to settle outstanding debts with its creditors. The creditors will have the opportunity to vote on the plan before it undergoes evaluation for a final decision by Judge Sean Lean. This strategic move aligns with Genesis’ efforts to streamline its financial obligations after suspending withdrawals in November 2022 and subsequently filing for bankruptcy in January.
Extended Legal Battles
It is worth noting that this legal entanglement is just one facet of Genesis’ challenges. The company recently filed a lawsuit against crypto exchange Gemini, seeking to recover nearly $670 million in transfers. Simultaneously, Gemini has retaliated with a separate lawsuit, aiming to secure control over $1.6 billion in Grayscale Bitcoin Trust shares.
Adding to the complexity, both Genesis and Gemini find themselves entangled in legal proceedings with the U.S. Securities and Exchange Commission, accused of selling unregistered securities.
Furthermore, the state of New York has filed a joint lawsuit against the duo and DCG, alleging fraudulent activities leading to investor deception. As the legal saga unfolds, the crypto industry continues to navigate regulatory scrutiny and internal disputes, highlighting the evolving landscape of digital asset management.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Source: https://cryptodaily.co.uk/2023/11/genesis-dcg-legal-drama-heading-toward-resolution