Creditors of Genesis Global Capital (GGC) have expressed their opposition to a tentative deal struck between the defunct lender and its parent company Digital Currency Group (DCG). In a Tuesday filing, the creditors described the treatment of over a billion dollars in outstanding loans as “wholly insufficient.” The wind-up of GGC has been delayed for months due to talks over the contribution that DCG should make. An in-principle deal announced by Genesis on Tuesday saw DCG agreeing to a series of partial repayments to satisfy liabilities of $630 million in unsecured loans due in May 2023 and $1.1 billion due in 2032.
The creditors, who have a combined $2.4 billion in claims against GGC, have taken exception to DCG and CEO Barry Silbert being released from future legal claims. They have threatened to block any final bankruptcy deal that incorporates the plans, accusing Genesis and a formal committee that represents creditors of neglecting their fiduciary duty to maximize recoveries by agreeing to the DCG deal.
In the Tuesday filing that announced the deal, Genesis said it could result in recoveries of 70%-90% for unsecured creditors, and said that “constructive discussions” were ongoing with the lenders’ grouping.