According to a court filing on Tuesday, cryptocurrency venture capital firm Digital Currency Group (DCG) has reached a preliminary agreement on a Chapter 11 bankruptcy plan with creditors of its crypto lending subsidiary, Genesis Global Capital (GGC).
The Ad Hoc Group of Genesis Global Capital (GGC) lenders, responded to a public bankruptcy plan update, calling the in-principle agreement “wholly insufficient.”
A little while ago, there was an announcement that DCG had tentatively agreed with Genesis’ unsecured creditors and debtors. They suggested that these creditors might get back 70% to 90% of the money they’re owed, stated in terms of US dollars.
The ad hoc group emphasized that they do not endorse the suggested agreement. They described DCG’s contribution as inadequate to cover the loan sums completely.
The filing stated, “The Ad Hoc Group, which includes dozens of creditors for whom these assets are critical, does not have such luxury and cannot support the proposed terms of the plan update which permit DCG to walk away untouched and, in fact, pay less than already committed.”
The ad hoc group claimed that the debtors and UCC have agreed to a process non-consensual third-party releases that would wrongly result in the release of claims against DCG and its related parties.
The lenders stated, “Instead of receiving $630 million that matured and should have been paid 3 months ago, DCG will only be paying $275 million now and will pay another $328.8 million in another 2 years.”
During the cryptocurrency market downturn in 2022, Genesis, a company that lends out cryptocurrencies, faced financial difficulties. By January 2023, Genesis filed for bankruptcy because they couldn’t meet their financial obligations.
Also Read: DCG and Genesis Reach In-Principle Deal to Resolve Bankruptcy Claims
