Crypto Titan Digital Currency Group Opposes Genesis’ Restructuring Plan for Favoring Select Creditors

In a ineligible papers filed connected Feb. 6, 2024, the crypto juggernaut, Digital Currency Group (DCG), voiced absorption to Genesis’ revised bankruptcy strategy for aggregate concerns. DCG argues that the program favors definite creditors implicit others unjustly, and the company’s ineligible squad charges Genesis with violating their fiduciary responsibilities and presenting the connection successful atrocious faith.

DCG Raises Legal Concerns Over Genesis’ Bankruptcy Strategy, Seeks Plan Rejection

Attorneys from Weil, Gotshal, and Manges LLP, representing Digital Currency Group (DCG), person lodged a ceremonial objection against Genesis‘ updated bankruptcy scheme, alleging it contravenes Section 1129 of the Bankruptcy Code. DCG argues the program constitutes an impermissible “cramdown” that fails to align with ineligible standards for bankruptcy, purportedly allowing creditors to assertion recoveries exceeding the values assessed astatine the filing date, among different infractions. Adding to the complexity, Genesis operates nether the DCG umbrella.

DCG further argues that the scheme’s allocation rules are overly intricate and muddled, breaching definite established norms of bankruptcy legislation. The institution maintains that these rules disproportionately payment a prime radical of creditors astatine the disbursal of others, efficaciously depriving DCG of important fiscal and governance rights. The ineligible squad deems the preferential attraction of definite creditors done setoff rules and the modification of DCG’s rights arsenic an equity holder to beryllium against the law.

“The amended program besides seeks to disenfranchise DCG successful a myriad of different ways, including stripping DCG of fundamentally each its rights successful its capableness arsenic an equity holder with nary ineligible authorization to bash so,” the tribunal filing details. “In short, the amended program renders DCG an equity holder successful sanction only. This benignant of bare seizure of equity holder rights successful nonstop contravention of instrumentality and nationalist argumentation is the precise explanation of atrocious faith.”

The DCG attorneys add:

Because the amended program was not projected successful bully religion and violates galore principles of law, it should beryllium rejected.

DCG’s objection comes connected the heels of Genesis seeking authorization to merchantability disconnected $1.4 cardinal successful Grayscale’s Bitcoin Trust (GBTC). This determination was promptly lauded by the New York-based Gemini, which called it an “important step” toward settling. In the tribunal papers filed connected Tuesday, DCG expressed disapproval of the process utilized to trade the revised plan, criticizing it arsenic the result of alleged secretive talks that near DCG retired and unjustly advantaged definite creditors to the detriment of DCG.

What bash you deliberation astir DCG’s objection to Genesis’ amended bankruptcy plan? Share your thoughts and opinions astir this taxable successful the comments conception below.