- Creditors, according to Harrington, need additional time to consider the implications.
- Over $1.65B is owed to Genesis by DCG, and this has caused a snag in the proceedings.
The U.S. authorities said in a filing on Wednesday that a revised bankruptcy plan submitted by cryptocurrency lender Genesis last week marks a substantial change of intentions. Instead of reorganizing, the lender is now trying to sell off its assets.
The filing by U.S. Trustee William Harrington said that the apparent U-turn by Genesis which was done after the crypto lender and its parent firm Digital Currency Group (DCG) faced litigation by the New York Attorney General might add further delays to the wind-up process.
Harrington, a DOJ official stated:
“The prior plan provided for the sale of assets of the debtors and a non-debtor affiliate, a discharge of the debtors, and the reorganization of any unsold assets for the benefit of the claim holders. The liquidating plan provides for the liquidation of all three debtors … the debtors have substantially and materially modified the sale plan.”
Snag in Bankruptcy Proceedings
Creditors, according to Harrington, need additional time to consider the implications of the October 24 modifications before casting a vote on whether or not to accept them.
Over $1.65 billion is owed to Genesis by DCG, and this has caused a snag in the bankruptcy proceedings, which began in January. Genesis said in a filing last week that a merger with DCG is “not a viable route” in light of NYAG Letitia James’s allegations of fraud against DCG, Genesis, and its business partner Gemini. Also, all three businesses have refuted James’s claims.
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