According to a Genesis creditor, the revised restructuring plan that Genesis, Digital Currency Group, and creditors have suggested will result in creditors receiving at least 80% of their money back.
Genesis Global declared it had struck a “in principle deal” with Digital Currency Group (DCG) and its creditors on February 6. Genesis Global Holdco, Genesis’ holding company, would receive DCG’s ownership stake in Genesis Global Trading, the brokerage division of Genesis.
According to the terms of the arrangement, DCG would exchange convertible preferred stock for an existing $1.1 billion promissory note with a 2032 due date. Additionally, it will restructure its current $526 million 2023 term loans and make them receivable to creditors.
In accordance with the deal, cryptocurrency exchange Gemini will also provide $100 million to help its Gemini Earn members who have funds frozen with the insolvent company. Genesis would attempt to list its then-owned Genesis Global Trading firm for sale while these transactions, which require the required court clearance, are still pending closure.
The scheme has a recovery rate of about $0.80 per dollar deposited, with a route to $1.00 for Genesis creditors, according to a user update from Donut on February 6. As part of its Chapter 11 bankruptcy proceedings, Genesis is currently restructuring as a result of a liquidity issue in November brought on by the failure of cryptocurrency exchange FTX.
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