Digital Currency Group (DCG) plans to hand its equity stake in Genesis’ trading arm to Genesis Global, which will then be sold, pending court approval.
Creditor Genesis has revealed that the proposed new restructuring plan between Genesis, Digital Currency Group, and creditors will see creditors recover at least 80% of their money.
On Feb. 6, Genesis Global announced that it had reached an “agreement in principle” with Digital Currency Group (DCG) and its creditors, which will eventually see its crypto business on the market making arms sold as part of the restructuring effort.
DCG will contribute its equity in Genesis Global Trading – the trading arm of Genesis – to Genesis Global Holdco, a Genesis company. The transaction will consolidate all Genesis-related companies under a single holding company.
Under the terms of the agreement, DCG will exchange $1.1 billion in existing promissory notes due 2032 for convertible bonds. It would also refinance the current 2023 term loan amounting to $526 million and make payments to creditors.
The deal will also see crypto exchange Gemini contribute $100 million to Gemini Earn users who have cash-frozen and bankrupt companies. Pending the closing of these transactions, which require the necessary court approval, Genesis will seek to put the then-owned Genesis Global Trading Company up for sale.
A Feb. 6 update from the users of the lender Genesis and the cryptocurrency platform Donut said that the plan “has a return of about $0.80 per dollar saved, and a path to $1.00” for Genesis borrowers.
He added that the revenue is based on “the amount of capital, the cost of liquidation, and taking into account the unknown costs associated with the remainder of this debt.”
Genesis is currently being reorganized as part of a Chapter 11 bankruptcy proceeding stemming from the November bankruptcy caused by the collapse of the crypto exchange FTX. Genesis Global Trading was not included in the company’s Chapter 11 filing at the time, with Genesis Global Holdco announcing that the company would “continue with the consumer business”.
At the first bankruptcy hearing in January, Genesis lawyers said the company was seeking a quick resolution to its dispute with creditors and expressed optimism that the company would emerge from the chapter’s bankruptcy process. 11. at the end of May.
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