The Digital Currency Group (DCG) and Genesis creditors have appeared to resolve the bankruptcy claims. An in-principle deal has been made, according to a court filing on Tuesday.
The deal could help unsecured creditors to recover 70-90% of their claims in USD equivalent, and 65-90% of their claims on an in-kind basis, depending on the denomination of the digital asset. The estimated recoveries are subject to market pricing and definitive documentation.
Under the terms of the new deal, DCG would exchange its existing $630 million in unsecured loans due in May 2023 and $1.1 billion under an unsecured promissory note due in 2032 for a new partial repayment agreement.
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 installment payments after the date of the partial repayment agreement on account of the May 2023 maturities of the $639 million loan.
The deal is still subject to court approval and final documentation. However, it is a significant step forward in the bankruptcy case and could help Genesis emerge from Chapter 11 in the coming months.
The deal is also a positive sign for the crypto industry as a whole. It shows that even in the midst of a bear market, there is still interest in resolving bankruptcy cases and helping companies get back on their feet.
The in-principle deal is a major development in the Genesis bankruptcy case. It is still too early to say how the deal will ultimately play out, but it is a positive sign for both DCG and Genesis creditors.
