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Crypto News: In a bid to resuscitate a proposed bankruptcy exit plan supported by the crypto conglomerate Digital Currency Group, the bankrupt crypto lender Genesis and a significant creditor group have agreed to come together on a 30-day mediation period. The agreement comes as a result of a request that Genesis Global made earlier in the week to the United States Bankruptcy Court for the Southern District of New York to appoint a mediator to help in the terms and conditions of Genesis owner Digital Currency Group’s contribution to the debtors’ reorganization plan.
Genesis & Creditors Enter Crucial Mediation
On Friday, an attorney representing Genesis, Sean O’Neal, announced that the cryptocurrency lender has consented to a 30-day mediation procedure that will include its committee of unsecured creditors. This committee has been against the planned restructuring deal an according to O’Neal, Genesis is working towards holding two “substantive” mediation sessions before May 8th. He stated that after the mediation process is over, the final terms of the agreement would also be made public.
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According to a report by Bloomberg, the creditor’s committee at Genesis is opposed to the company’s present proposal to restructure, and it is looking for improved terms. Philip Abelson, a lawyer who represents the creditors’ committee, stated that his client’s position has not changed, “and we do not want our participation in the mediation to be misconstrued.”
Despite this, Judge Lane, who is currently presiding over the case, highlighted the fact that both sides had agreed to mediate the dispute as “significant progress.” Lane was quoted as saying:
Obviously, folks are doing a lot of work, heavy lifting to get things moving along.
Gemini’s Growing Troubles
In February, the attorneys for Genesis Global Holdco issued a term sheet describing a settlement with creditors. The document shows that DCG would bear a significant portion of the burden in the reorganization of the insolvent cryptocurrency lender.
As reported earlier on CoinGape, initially the agreement received the backing of creditors who collectively represented more than $2 billion in claims against Genesis of which Winklevoss’ Gemini Trust was also a part.
After the failure of FTX in November of last year, Genesis’ lending arm stopped withdrawals and later filed for protection under bankruptcy laws in January.
Also Read: Coinbase CEO Hits Back At U.S. SEC, Says “Coinbase Does Not List Securities”
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