Genesis defeats parent company DCG over payment to creditors

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• Genesis Global Capital receives court approval to distribute billions of dollars in digital assets and cash to creditors
• Judge Sean Lane last week approved Genesis’ Chapter 11 repayment plan with a unique structure for returning the cryptocurrency.
• The ruling allows Genesis to distribute frozen assets starting in November 2022.

Genesis Global Capital last week won court approval to distribute billions of dollars in digital assets and cash to creditors, overcoming a legal challenge from parent company Digital Currency Group (DCG). On Friday, Judge Sean Lane approved Genesis’ Chapter 11 repayment plan. The plan features an innovative structure for returning Bitcoin and other tokens to creditors. The ruling allows Genesis to proceed with the distribution of assets that have been frozen since the incident. The company has suspended withdrawals in November 2022 following the bankruptcy of several major cryptocurrency companies.

Digital Products DCG doesn’t seem to be getting anything.

DCG had argued that the repayment plan would cost a lot of money. back and forth over the past yearalleged that it unfairly benefited Genesis’ creditors at its expense and that the claims should have been based on the cryptocurrency price at the time of Genesis’ bankruptcy filing in early 2023.

At the time, Bitcoin was worth about $24,000, a sharp contrast to Friday’s trading value of more than $66,700.

In a sweeping 135-page decision, Judge Lane rejected DCG’s legal challenges, stating that as a stockholder, DCG lacked legal standing to oppose the Chapter 11 plan. He emphasized that DCG at the end of the repayment period will not receive any value as the assets of the bankrupt subsidiary are insufficient to repay creditors in full, and this explains DCG’s dissatisfaction with this plan. further explained.

Despite the ruling, the DCG remains open to the option of appealing Judge Lane’s decision.

Digital Products Judge Lane resolves other issues

Genesis’ proposal estimates that creditors who have lent digital assets could recover up to 77% of the amount owed, which is significantly more than they would receive if the DCG challenge was successful. The plan has received significant support from Genesis’ creditors, including customers of Gemini Earn, a lending program run in partnership with the Winklevoss brothers’ Gemini Trust Company.

Judge Lane also approved a related settlement with New York Attorney General Letitia James, who sued Genesis over the Earn program. The settlement ensures that assets that could have gone to state authorities will instead be returned to former Earn customers.

Previously, a bankruptcy judge granted another settlement with the U.S. Securities and Exchange Commission, ending another complaint related to the Earn program, which has now ended.