Digital Currency Group (DCG) has reached an in-principle deal with Genesis creditors to resolve the claims brought up in Genesis' bankruptcy, according to a court filing on Tuesday.
The plan could result in the recoveries of 70%-90% in USD equivalent for unsecured creditors and 65%-90% recovery on an in-kind basis depending on the denomination of the digital asset. All the estimated recoveries are subject to market pricing and definitive documentation.
DCG is also the parent company of CoinDesk.
"The agreement in principle will be documented and submitted to the Bankruptcy Court for final approval in connection with confirmation of a chapter 11 plan. We look forward to executing on this important milestone and for Genesis to begin its distributions to creditors," DCG said in a statement.
To satisfy DCG's existing liabilities of 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 agreement was agreed on. The repayment would be done in two tranches – approximately $328.8 million with a two-year maturity and $830 million with a 7-year maturity.
DCG would also pay $275 million in four installments after the date of the partial repayment agreement on account of the May 2023 maturities.
Genesis Global Holdco, LLC and its subsidiaries filed for bankruptcy with the U.S. Bankruptcy Court for the Southern District of New York in January 2023. The filings revealed Genesis owed over $3.5 billion to its top 50 creditors, including crypto exchange Gemini, trading giant Cumberland, Mirana, MoonAlpha Finance and VanEck’s New Finance Income Fund.
UPDATE (Aug. 29, 06:25 UTC): Updates headline and image. Adds context in the last paragraph.
UPDATE (Aug. 29, 11:15 UTC): Adds statement from DCG.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.