The bankruptcy case of cryptocurrency company Genesis has been postponed to the first hearing. According to court filings, the first hearing in Genesis Capital’s bankruptcy case will be held on January 23.
Genesis Capital’s bankruptcy case postponed
According to court filings, the first hearing in Genesis Capital’s bankruptcy case will be held on January 23. Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York will hear the case. On the matter, Buchanan Ingersoll & Rooney’s bankruptcy attorney, Mark Pfeiffer, said under Chapter 11, known as the restructuring division, companies can propose a restructuring plan to creditors and are allowed to continue their business.
As a first step in bankruptcy proceedings, the court will decide whether Genesis Global Holdco and two of its lender business subsidiaries, Genesis Global Capital and Genesis Asia Pacific (collectively, Genesis Capital), should accept the exemption requested under Section 11. Joint administration of cases by the companies was also requested.
A committee for unsecured creditors will also be appointed by the United States Board of Trustees as part of the proceedings. The committee will have the right to request consultation from companies and participate in the restructuring plan before making important decisions or changes. Court records reveal that twenty of the largest unsecured creditors are usually selected for the committee.
How did the cryptocurrency company get to this point?
Companies have debts of up to $10 billion. Genesis filed for bankruptcy protection on January 19, more than two months after it announced $175 million risk to FTX alongside liquidity problems caused by the crypto exchange’s collapse. cryptocoin.comAs you follow, withdrawals from the Genesis Global Capital platform have been suspended since November 16, 2022.
According to a press release, the Genesis Chapter 11 plan requires that all claims be settled globally and a fund created that will distribute assets to creditors. As part of a ‘dual process’, companies will apparently pursue a ‘sale, raise capital and/or an equity transaction’ which will enable their business to ’emerge under new ownership’.
Genesis Capital’s parent company, Digital Currency Group (DCG), recently denied taking part in filing for bankruptcy, claiming that a special committee of independent directors recommended and decided to file for Chapter 11 bankruptcy protection. Only Genesis’s lenders have filed for bankruptcy protection. Meanwhile, Genesis Global Trading and Genesis’ spot and derivatives trading unit will continue to operate.
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