Genesis Seeks Court Nod to Cut 3AC Claim to $33M
Genesis, the crypto lender facing bankruptcy, has made a decisive move to streamline its Chapter 11 reorganization. The firm has sought court approval to significantly reduce the claim of Three Arrows Capital (3AC), a defunct hedge fund, from over $1 billion to $33 million. This proposed settlement marks a critical step in Genesis’s reorganization efforts, aiming to smooth the path toward a stable financial future.
Genesis Moves to Streamline Bankruptcy Process
Genesis’s initiative to restructure its obligations with 3AC involves reducing the claim and relinquishing rights to certain crypto assets. As part of the agreement, Genesis will forfeit its claims to an undisclosed amount of AVAX and NEAR tokens. This move signifies the lender’s commitment to resolving its largest outstanding claims following a similar settlement with the failed crypto exchange FTX.
The proposed settlement is seen as a strategic decision by Genesis to avoid the uncertainties and costs associated with prolonged litigation. This approach is expected to facilitate a smoother and more efficient reorganization process under Chapter 11. By resolving its largest claims, Genesis positions itself for prompt distributions and a clearer path to recovery.
Judge to Review Genesis-3AC Settlement Proposal
The settlement proposal is pending approval by Judge Sean Lane at the U.S. Bankruptcy Court for the Southern District of New York. Meanwhile, other creditors like Gemini have until November 24 to raise objections, with a hearing scheduled for November 30. This hearing will provide a platform for all parties to discuss the settlement terms before its final implementation.
Genesis’s proposed settlement with 3AC marks a significant turn in its ongoing reorganization efforts. The lender aims to streamline its path to financial stability by reducing its largest claim and relinquishing certain assets. The upcoming court hearing and creditor responses will further shape this critical phase in Genesis’s recovery journey.
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