According to court documents, the first bankruptcy hearing for Genesis Capital will take place on January 23 at 2:00 pm (EST). The case will be heard by Judge Sean H. Lane of the United States Bankruptcy Court for the Southern District of New York.
Under Chapter 11, known as the reorganization chapter, companies can offer a reorganization plan to creditors while still being allowed to continue in business, Mark Pfeiffer, a bankruptcy attorney at Buchanan law firm Ingersoll & Rooney, told .
As a first step in bankruptcy proceedings, the court will decide whether to accept the relief requested under Chapter 11 by Genesis Global Holdco and its two lending subsidiaries, Genesis Global Capital and Genesis Asia Pacific, collectively known as Genesis Capital. The companies also demanded joint conduct of business.
The United States Trustee will also appoint a committee for unsecured creditors as part of the proceedings. The Committee will have the right to require companies to consult before making major decisions or changes, and to participate in the reorganization plan. Court documents show that the twenty largest unsecured creditors are usually chosen to sit on the committee.
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With liabilities of up to $10 billion, the companies filed for bankruptcy protection on January 19, more than two months after the $175 million exposure on FTX and liquidity problems caused by the collapse of the crypto exchange. Withdrawals from the Genesis Global Capital platform have been suspended since November 16, 2022.
The Genesis Chapter 11 plan provides for a global resolution of all claims and the creation of a trust that will distribute assets to creditors, the press release said. As part of the “double process”, the companies will conduct a “sale, fundraising and/or balancing deal”, which will presumably allow their business to “emerge under new ownership”.
Genesis Capital’s parent company, Digital Currency Group (DCG), recently denied involvement in the bankruptcy filing, alleging that a select committee of independent directors recommended and decided to file for Chapter 11 bankruptcy protection. Only Genesis lending institutions filed for bankruptcy protection. bankruptcy. Genesis Global Trading and the Genesis Spot and Derivatives division will continue to operate.