Genesis Teams Up with 3AC in the Bankruptcy Court
The bankrupt cryptocurrency lender Genesis is making waves by asking the court to bless its proposed settlement with the now-defunct hedge fund Three Arrows Capital (3AC). In a filing dated Nov. 9, Genesis argues that 3AC deserves an allowed general unsecured claim of $33 million. Now, before your brain goes haywire, let’s unpack that a bit — it’s only about 3.3% of the whopping $1 billion in claims initially thrown against Genesis debtors.
A Closer Look at the Dollars and Cents
As the court papers reveal, Genesis is essentially saying, “Hey, 3AC, we’ll give you $33 million, and you can be on your merry way with this little slice of pie.” They mention that the $1 billion in claims 3AC asserted against them was the biggest on the table in the Chapter 11 cases that followed the FTX exchange’s spectacular collapse. 3AC wasn’t just anybody; they were among Genesis’s largest borrowers between 2020 and 2022, until everything hit the fan.
AVAX and NEAR: The Token Troubles
But wait, there’s more! In the proposed settlement agreement, Genesis is keen to hand over all claims to AVAX and NEAR tokens to 3AC. Basically, they’re saying, “These tokens? They’re yours now, good luck!” This little trade-off aims to help both parties exit this bankruptcy mess with fewer liabilities hanging around their necks, as stated in the document.
The Great Escape Plan: Chapter 11 Reorganization
Genesis insists that this settlement is critical for smoothing the bumpy road to their Chapter 11 reorganization plans. Who wouldn’t want to eliminate the threats and stressful legal fees looming over everyone? A smooth path means quicker distributions to creditors and a better chance to breathe easy. In the lovely words of Genesis, it’s about “prompt distributions” and shooing away the risks and uncertainties of drawn-out litigation.
What’s Next? Mark Your Calendars!
Now, here’s where it gets a bit spicy: the proposed settlement has been tossed over to the United States Bankruptcy Court for the Southern District of New York, waiting for the nod from Judge Sean Lane. Hold onto your hats, because creditors have until Nov. 24 to raise any objections, with a nail-biting hearing scheduled for Nov. 30. Will Judge Lane give it the green light, or will he throw a wrench in the works?
As the dust settles, it’s worth noting that this story comes just in time to remind everyone of the one-year anniversary of the FTX collapse, which sent ripples through the entire crypto industry, leaving countless companies, including Genesis, scrambling to recover from losses such as the $175 million tied up on FTX.
