Genesis Bankruptcy Enters 30-Day Mediation Process
In a bid to reach a final resolution for the Genesis bankruptcy plan, several parties have agreed to a 30-day mediation process. Genesis, Digital Currency Group (DCG), the Unsecured Creditors Committee (UCC), the Creditor Committee, and Gemini will all be part of the mediation process, which is expected to begin soon.
This week, Genesis, DCG, Creditors Committee and Gemini agreed to start a 30-day mediation process to drive to a final resolution as soon as possible. If DCG is unable to pay and/or restructure its debt of $630m on May 9th – 11th, DCG risks defaulting on its obligations.…
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Mediation Process
The mediation process was directed by Bankruptcy Judge Lane, and an order is expected to be entered as early as Monday. This follows the filing of a Term Sheet that reflected an agreement in principle on February 10, 2023. The UCC had presented revised terms to DCG for its contribution to the Genesis creditors, based on the UCC’s ongoing investigation, last week.
The mediation will focus on DCG’s economic contribution to the bankruptcy estate for the benefit of all creditors, including Earn users. The proposed mediation provides for two meetings before May 8th, which is an important date, as DCG owes the Genesis bankruptcy estate $630 million on May 9th – 11th. If DCG is unable to pay and/or restructure its debt, it risks defaulting on its obligations.
Swift Resolution
Although the mediation is scheduled for up to 30 days, the parties are expected to work expeditiously towards an agreement in the immediate window. Gemini has expressed support for the mediation process and is looking forward to working with the parties to bring the bankruptcy plan to a conclusion. The company has also expressed frustration on the record before Judge Lane about the pace of progress among the parties and the need for urgency.
The next status conference with the Court is scheduled for May 4th. It remains to be seen whether the mediation process will be successful in bringing about a final resolution for the Genesis bankruptcy plan. However, all parties seem to be working towards a resolution and are aware of the urgency of the situation.
