The parent company of Genesis, Gemini, and CoinDesk, Digital Currency Group (DCG), has reached a preliminary agreement with the creditors of Genesis. This agreement, formalized in a court filing earlier this week, aims to resolve the financial claims that arose following Genesis’ bankruptcy announcement earlier this year. Genesis had suspended withdrawals in November of last year following the collapse of FTX, resulting in a bankruptcy filing in early 2023.
According to the records from the US bankruptcy court for the Southern District of New York, Genesis Global Holdco, LLC and its subsidiaries owe over $3.5 billion to their principal creditors, including cryptocurrency exchange Gemini, trading behemoth Cumberland, and VanEck’s New Finance Income Fund.
Repayment Dynamics: Unveiling a Multi-Tranche Repayment Strategy
To offset DCG’s imminent liabilities, which amount to approximately $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured promissory note due in 2032, a new partial repayment structure has been orchestrated. This strategy includes a two-tranche repayment system: one involving around $328.8 million with a maturity of two years, and another comprising $830 million with a maturity of seven years. Additionally, DCG will allocate $275 million in four subsequent installments, focusing on the May 2023 deadlines.
The new agreement is notable as it proposes recovery rates ranging between 70% and 90% in USD equivalent for unsecured creditors, and between 65% and 90% recovery on an in-kind basis, subject to definitive documentation and market pricing.
