Genesis Requests Court Approval for $33M Settlement with Three Arrows Capital
Summary:
Genesis, a bankrupt crypto-lending company, has requested court approval for a settlement agreement with the failed crypto hedge fund, Three Arrows Capital (3AC). The proposal includes a $33 million allowed general unsecured claim for 3AC against Genesis, which is 3.3% of the original $1 billion claims. Genesis will also relinquish all claims to Avalanche (AVAX) and Near Protocol (NEAR) tokens in favor of 3AC. The company believes the settlement will simplify its Chapter 11 reorganization plan and reduce potential litigation risks and expenses. A hearing is scheduled for November 30.
Genesis, the beleaguered crypto-lending firm, is seeking judicial acceptance of its planned settlement deal with the faltered cryptocurrency hedge fund, Three Arrows Capital (3AC). Filed to the court on November 9, Genesis proposed that 3AC, a debtor, should be accorded an allowed general unsecured claim of $33 million against it. This sum represents about 3.3% of the $1 billion claims that were originally leveled against Genesis debtors. Genesis articulated that the proposed settlement stipulates that 3AC should accept the claim of $33 million as full payment for claims exceeding $1 billion made against Genesis debtors.
Genesis declared that the $1 billion claims instituted against it by 3AC are the highest among those annually filed in Chapter 11 cases associated with the FTX exchange's downfall. Genesis emphasized that 3AC had been one of its most significant borrowers between 2020 and 2022, up until the point of 3AC's collapse.
Genesis also wishes to forfeit all its claims and entitlement to Avalanche (AVAX) and Near Protocol (NEAR) tokens to 3AC. The proposed settlement suggests that both the faltering firms relinquish any residual liabilities, thereby mutually releasing each other from liability as designated in the settlement agreement though maintaining any possible claims against DCG.
Genesis emphasized that this settlement is necessary to create a streamlined route for its Chapter 11 reorganization plan, and to minimize potential risks and expenses incurred from protracted litigation. The proposed settlement, it says, among other benefits accrued to Genesis estates, eases the process of confirming Genesis creditors' Chapter 11 reorganization plan, and hastens distribution while eliminating the risks, expenses, and uncertainty associated with ongoing litigation involving multiple parties.
The settlement proposal was submitted to the United States Bankruptcy Court in the Southern New York District and awaits approval from Judge Sean Lane. Creditors can protest against the settlement until November 24, with a hearing set for November 30.
The news surfaces about a year after the FTX exchange crumbled, pushing the cryptocurrency industry into a significant bear market. Genesis and 3AC are among numerous firms impacted by FTX's breakdown due to their exposure to the platform, with Genesis's derivative business losing access to $175 million tied up in FTX.
Published At
11/10/2023 1:51:11 PM
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