Genesis Creditors Allegedly ‘Walk Away’ From Previously Agreed Bankruptcy Restructuring Plan

Creditors of Genesis, a bankrupt energy company, are said to have abandoned a previously agreed restructuring plan. The lenders reportedly walked away from the plan with no explanation, leaving the company in limbo. This move has raised concerns about the financial stability of the company, which may now be facing a prolonged bankruptcy process. Genesis has been struggling financially for some time and filed for bankruptcy in December 2020. The company’s future remains uncertain as it faces mounting debt and a lack of investor confidence.

Genesis Capital, a crypto lender that went bankrupt due to the market turmoil last year, is facing yet another hurdle in its bankruptcy case. Digital Currency Group (DCG), the parent company of Genesis Capital, has accused some of the creditors of the company of reneging on their agreement and making fresh demands more than two months after agreeing to a comprehensive settlement. This latest setback is likely to prolong the court process, according to reports.

Genesis Capital is among several cryptocurrency companies that were affected by the market turmoil last year, including Celsius Network and Vault. After FTX, another crypto firm, filed for bankruptcy, Genesis’s loan book was shut down, and the company soon faced redemption requests that destabilized it. As a result, Genesis Capital filed for bankruptcy after its lending arm paused withdrawals. The firm owes $2.4 billion to its main creditors out of nearly $3.4 billion in liabilities and had agreed to an initial restructuring plan with its parent company and creditors.

DCG has criticized the actions of Genesis Capital’s creditors, stating that they have gone back on their word and created new demands. The company is now seeking a mediator to help resolve the issue as the deal between Genesis and its parent company hit a roadblock. The new court filing indicates that the mediator’s intervention is urgent since DCG owes GGC approximately $630 million pursuant to fixed-term loans due during the second week of May.

As reported earlier, Genesis and DCG had reached an agreement that included shutting down the former’s loan book and the sale of its bankrupt entities. Furthermore, DCG was tasked with refinancing its existing 2023 term loans through a new, junior secured term loan in two tranches made payable to creditors in the aggregate total value of around $500 million.

In conclusion, the recent dispute between Genesis Capital’s creditors and DCG could prolong the court proceedings and delay the resolution of the case. It remains to be seen how the situation will unfold, but the involvement of a mediator may help resolve the issue and allow the bankruptcy case to proceed smoothly.

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