Genesis Capital Bankruptcy Case to Begins
Author:On Jan. 23 at 2:00 pm EST, Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York will preside over the initial hearing for the Genesis Capital bankruptcy case, as indicated in the court filings.
Mark Pfeiffer, a bankruptcy attorney at Buchanan Ingersoll & Rooney, explained that with Chapter 11 bankruptcy, companies can present creditors with a reorganization plan while still carrying on with their operations.
The court will first determine if it will approve the requests of Genesis Global Holdco and its two lending subsidiaries, Genesis Global Capital and Genesis Asia Pacific, collectively known as Genesis Capital, to receive Chapter 11 relief. Additionally, the companies have requested that their cases go through a joint administration.
The United States Trustee will appoint a committee for unsecured creditors during the proceedings. This committee will be granted the ability to require the corporate entities to confer with them before any important alterations are to be made and to be involved in forming the reorganization plan. Normally, the committee consists of the twenty most prominent unsecured creditors, as specified in the court documents.
The companies stated that, with liabilities amounting up to $10 billion, they had to seek bankruptcy protection on January 19th, due to the $175 million blow they endured from the fall of FTX as well as their liquidity issues. Withdrawals from Genesis Global Capital's platform have been forbidden since November 16th.
The press release outlining Chapter 11 of the Genesis plan stipulates a universal conclusion of all demands, along with the formation of a trust that can deliver resources to lenders. Utilizing a two-track scheme, the businesses will continue developing potential sales, capital raises, or an equitization technique that could allow for the company to come under a new direction.
Digital Currency Group (DCG), the parent firm of Genesis Capital, recently dismissed any connections to the bankruptcy filing. They declared that a committee of independent directors chose and directed them to pursue Chapter 11 bankruptcy protection. However, solely Genesis' lending branches filed for bankruptcy. The spot and derivatives trading entities of Genesis will stay in business.