Genesis seeks 100-day extension for recovery plan as DCG misses $630M payment

Bankrupt crypto lender Genesis has filed a motion to extend the exclusivity period for its reorganization plan by 100 days.

Why Genesis sought an extension

In a May 19 court filing to the United States Bankruptcy Court for the Southern District of New
York, the bankrupt lender, said it needed the extension “to achieve a value-maximizing restructuring without the interruption of a competing plan.”

Genesis wrote that the size and complexity of its case was enough ground for the court to grant its request. According to the lender, its balance sheets showed billions of dollars in assets and liabilities that would be restructured.

Besides that, its operations in the digital assets industry mean its process is faced with an evolving regulatory regime that must be considered in its case.

The lender further highlighted that its request should be granted because it had made “good faith progress” towards exiting the bankruptcy and that the requested extension would “neither prejudice nor pressure creditors or any interested parties.”

Genesis will have until Aug. 27 to file a plan if the request is granted, while its exclusive solicitation period will be extended to Oct. 26.

Gemini says DCG missed a $630M payment.

Meanwhile, crypto exchange Gemini said the bankrupt lender’s parent company, Digital Currency Group (DCG), missed a $630 million payment due to its subsidiary last week.

DCG was one of the victims of the market contagion that swept many crypto firms in 2022. The crypto conglomerate owes nearly $1.7 billion to its lending subsidiary, Genesis.

In a May 19 Earn update, Gemini said it was considering whether to provide forbearance to avoid a DCG default. The crypto exchange added that this move would be hinged on if “the parties believe DCG will engage in good faith negotiations on a consensual deal.”

In a situation where an agreement cannot be reached, Gemini said it would work “with Genesis to suggest terms for an amended plan of reorganization that could be advanced without DCG’s consensual participation.” The crypto firm noted that this prompted Genesis’s May 19 request to extend its exclusivity period.

Meanwhile, Gemini added that it is preparing a Master Claim to be filed on May 22, seeking the return of $1.1 billion worth of crypto assets for its 232,000 Earn users.

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