By: Eva Baxter
Parent company, Digital Currency Group (DCG) has filed objections against the approval of its subsidiary's, Genesis, bankruptcy plan. DCG argued that this plan, secretly constructed, overcompensates creditors exceeding legal obligations, constituting a breach of bankruptcy code and evidencing lack of good faith. The corporate governance and economics privileges of DCG are eroding due to this plan, which they feel unfairly disadvantages them.
DCG is pushing for dismissal of this proposed plan due to its inability to support such 'complex and convoluted Distribution Principles'. They claim to be willing to fully support a plan offering 100% recovery for creditors, including post-petition interest, if and when their concerns are addressed. The face-off is not new between these companies with previous litigation over Genesis looking to recuperate a loan over $700 million in both fiat and cryptocurrency payments slated for May 2023 from DCG.
Despite DCG's public claim of having settled this whopping debt, some creditors firmly believe that they remain obligated to the defunct company, Genesis. Genesis filed for bankruptcy after succumbing to the bear market turmoil in 2022, which was followed by suspension of withdrawals post the FTX collapse in November 2022. As part of the ongoing bankruptcy process, Genesis has moved to liquidate $1.4 billion of its assets held in Grayscale Bitcoin Trust (GBTC).
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