CoinTelegraph reported:
A Genesis creditor has revealed the new proposed restructuring plan between Genesis, Digital Currency Group and creditors will see creditors getting back at least 80% of their funds.
On Feb. 6, Genesis Global announced it reached an “agreement in principle” with Digital Currency Group (DCG) and its creditors, which will eventually see its crypto trading and market-making arm sold as part of restructuring efforts.
DCG would contribute its share of equity in Genesis Global Trading — Genesis’ brokerage subsidiary business — to Genesis Global Holdco, the holding entity for Genesis.
The transaction would bring all Genesis-related entities under the same holding company.
The terms of the agreement will see DCG exchanging an existing $1.1 billion promissory note due in 2032 for convertible preferred stock. It will also refinance its existing 2023 term loans with an aggregate value of $526 million and make them payable to creditors.
The agreement will also see crypto exchange Gemini contribute $100 million for its Gemini Earn users who have funds frozen with the bankrupt firm.
Pending the close of these transactions, which need the necessary court approval, Genesis will seek to put its then-owned Genesis Global Trading entity up for sale.
UPDATE: DCG/Genesis creditors have been told to expect capital returns of 80%.
**beyond that number depends on a convertible preferred equity note and “realized liquidation prices” based on DCG/Genesis assets.
— Andrew (@AP_Abacus) February 6, 2023
A Feb. 6 user update from the Genesis creditor and crypto yield platform Donut said the plan “has a recovery rate of approximately $0.80 per dollar deposited, with a path to $1.00” for Genesis creditors.
It added the recoverable amount depends on the “equity note, realized liquidation prices and considers the unknown costs associated with the remainder of this bankruptcy.”
Related: Genesis Capital’s fall might transform crypto lending — not bury it
Genesis is currently restructuring as part of its Chapter 11 bankruptcy proceedings stemming from a liquidity crisis in November brought on by the bankruptcy of crypto exchange FTX.
Genesis Global Trading was not included in the company’s Chapter 11 filing at the time, with Genesis Global Holdco saying the business would “continue client trading operations.“
At an initial bankruptcy hearing in January, Genesis lawyers said that the firm was looking for a quick resolution to its creditor disputes and expressed optimistic that the company would come out of Chapter 11 proceedings by late May.