Genesis granted plan extension as judge excludes FTX
US Bankruptcy Court Judge Sean Lane granted an extension to the mediation period between crypto lender Genesis and its debtors. The extended deadline is conditional on the cooperation of Genesis’ parent company, Digital Currency Group (DCG), in the lender’s restructuring process.
The mediation period between Genesis and its creditors, which was originally scheduled to end last month, has been extended until June 16.
The court’s ruling indicates the need for additional time to address and resolve creditors’ concerns and to facilitate a mutually agreeable outcome for all parties involved in the bankruptcy proceedings.
“There’s lots of different kinds of conversations that have to happen in connection with bankruptcies. The challenge always, of course, is that you can’t negotiate everything all at once,” Judge Lane said during the hearing.
In addition, Genesis has been granted an extension for its exclusive solicitation period. Originally requested until October 1, the exclusive solicitation period has now been extended until October 26. Furthermore, the company has the option to seek additional extensions as necessary in the future.
This extension allows Genesis more time to engage in discussions with potential investors or parties interested in the restructuring process.
Nevertheless, Gemini, along with other Genesis creditors, expressed frustration over the judge’s ruling. This stems from the ongoing uncertainty surrounding the bankruptcy case, which allegedly prolongs the process and delays the creditors’ ability to reach a timely resolution.
Gemini’s legal representatives also argued that the extension could result in greater financial harm to the parties involved in the bankruptcy case.
Judge Lane also rejected the request to include FTX in the settlement talks, where the bankrupt exchange claimed that Genesis owed them $3.9 billion. Instead, the judge granted the parties involved more time to develop a revised proposal that would determine how payments would be distributed to Genesis creditors.
The development comes two weeks after DCG missed a $630 million payment that was due last month to Gemini, the cryptocurrency exchange founded by the Winklevoss twins.
This situation was anticipated as there were concerns about the possibility of DCG defaulting on the loan or restructuring its debt, which is now being managed by Genesis’ bankruptcy estate. Gemini initially granted DCG a 30-day period to secure the necessary funds as part of a mediation process. The cryptocurrency exchange alleged that Genesis was responsible for the failure of its own interest-bearing lending product, Gemini Earn.