Genesis Sues Parent Company DCG Over $620M Unpaid Loans
The infamous bankrupt lender Genesis Global Holdco LLC filed a lawsuit against its parent company, Digital Currency Group. In a New York bankruptcy court, Genesis filed against the Barry Silbert owned DCG and DCG International Investments Ltd.
Genesis, the crypto lender that filed for bankruptcy in January and fired over 30% of its staff, aims to recover $620 million from DCG. The companies involved claim discussions for a potential deal to end the dispute are open.
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Why Did Genesis Sue DCG?
Genesis recently unveiled a debt repayment plan that the majority of the key creditors rejected despite the few in support. In an attempt to uphold the repayment commitments to the lenders, Genesis took the measure to file lawsuits against DCG.
In the lawsuit, Genesis claims that the loans it provided DCG remain unpaid despite maturing in May. The outstanding loan amount stands at $500 million from DCG and about 4,550 Bitcoin from DCGI. Genesis also filed to take back the accrued interest and late fees apart from the principal amount. Considering the current Bitcoin Price, 4,550 BTC amounts up to approximately $117,100,000.
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Lack Of Support From Creditors
Earlier, Genesis proposed a restructuring deal with the potential to offer the unsecured creditors a recovery of nearly 90%. However, for the deal to fall through, it needs the support from its key creditors that include the Winklevoss Twin owned Gemini.
The plan curtailed some creditors fronting additional funds to Genesis as an aid to help pay back other creditors quickly in return for a more significant share in the amount won by suing DCG. The estimated recovery amount could rack up to $2.8 billion.
According to previous reports, Gemini is on board the plan and trying to rally other creditors to join up in the effort to get more money out of Genesis’ parent company, DCG. It is unclear if the lawsuit is a part of the plan previously laid out by Genesis.
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