Genesis, the crypto lender currently grappling with bankruptcy, is taking decisive steps to streamline its Chapter 11 reorganization.
The company is seeking court approval for a substantial reduction in Three Arrows Capital’s (3AC) claim, a defunct hedge fund, from over $1 billion to $33 million. This strategic move is aimed at fostering a more efficient and stable financial future for Genesis.
Genesis Bankruptcy Restructuring Initiative
In an effort to restructure its obligations with 3AC, Genesis is proposing a significant reduction in the claim amount and surrendering rights to specific crypto assets. As part of this agreement, Genesis is relinquishing its claims to an undisclosed quantity of AVAX and NEAR tokens.
This action underscores the lender’s commitment to resolving its most substantial outstanding claims, following a similar settlement with the failed crypto exchange FTX.
Moreover, positioning the proposed settlement as a strategic decision, Genesis aims to sidestep the uncertainties and expenses linked to prolonged litigation, thereby facilitating a smoother Chapter 11 reorganization process.
Judge’s Role in the Settlement Proposal
The settlement proposal is currently awaiting approval from Judge Sean Lane at the U.S. Bankruptcy Court for the Southern District of New York.
Further, other creditors, such as Gemini, have until November 24 to voice objections, with a hearing scheduled for November 30. This hearing will serve as a platform for all involved parties to discuss the settlement terms before final implementation.
Genesis Strategic Positioning
This proposed settlement with 3AC signifies a significant turning point in Genesis’s ongoing efforts to reorganize. The lender is also strategically reducing its largest claim and forfeiting certain assets while positioning itself for prompt distributions and a clearer path to recovery.
The forthcoming court hearing and responses from creditors will also play a crucial role for shaping this pivotal phase of Genesis’s journey while moving toward financial stability.