, Bloomberg News
(Bloomberg) — Digital Currency Group struck a new repayment deal with its bankrupt subsidiary, Genesis Global Holdco LLC, as part of an agreement to end a lawsuit that sought roughly $620 million from DCG.
Genesis lawyer Sean O’Neal said during a Tuesday hearing that the deal will provide the bankrupt crypto lender with roughly $200 million in value over the next few weeks and requires DCG to complete outstanding payments in April 2024. If DCG defaults, Genesis can try to collect any unpaid amount, according to court papers.
The proposed agreement is meant to resolve a lawsuit Genesis brought in September to recover outstanding loans from its parent conpany. DCG, which has been making payments to Genesis since the lawsuit was filed, still owes its subsidiary $324.5 million as of Nov. 28, according to court documents.
Genesis said the agreement will avoid months of costly litigation with its parent company and guarantees the bankrupt crypto lender will be partially repaid what it’s owed. O’Neal said the deal doesn’t resolve other disputes with DCG related to Genesis’s plan for resolving its bankruptcy.
Genesis is also facing off in court against its former business partner Gemini Trust Co., and the two also face a suit brought against them from the US Securities and Exchange Commission. Meanwhile, NY state brought legal action against them and DCG.
The deal announced Tuesday will become part of Genesis’s proposed payout plan for its creditors. That plan will be sent to creditors for a vote. US Bankruptcy Judge Sean Lane will take that vote into consideration when he makes a final decision on the proposal.
Genesis filed for Chapter 11 protection in January, following several other large crypto firms into bankruptcy.
The bankruptcy is Genesis Global Holdco, LLC, 23-10063, US Bankruptcy Court, Southern District of New York (Manhattan).
©2023 Bloomberg L.P.
