On January 23 at 2:00 pm Eastern Time, the United States Bankruptcy Court for the Southern District of New York will hold the first hearing in Genesis Capital’s bankruptcy case.
Under Chapter 11 bankruptcy, companies are allowed to propose a reorganization plan to creditors while continuing business operations.
As part of the proceedings, the court will decide whether to accept the relief requested by Genesis Capital and a joint administration of the cases has been requested.
A committee for unsecured creditors will also be appointed by the United States Trustee. Genesis Capital filed for bankruptcy protection citing liabilities up to $10 billion in early January after disclosing a $175 million exposure to FTX and liquidity issues caused by the crypto exchange’s collapse.
The company’s plan calls for a global resolution of all claims and the creation of a trust that will distribute assets to creditors.
Additionally, a “dual track process” is being pursued, which would involve the “sale, capital raise, and/or an equitization transaction” that would enable the company to emerge under new ownership.
Genesis Capital’s parent company, Digital Currency Group (DCG), has denied involvement in the bankruptcy filing, claiming that a special committee of independent directors recommended and decided to file for Chapter 11 bankruptcy protection.
