Genesis Global lenders object to exclusivity extension motion

By Sarah Lizee

Olympia, Wash., Oct. 20 – Genesis Global Holdco, LLC’s motion seeking a third extension of its exclusive periods to file and solicit votes on a Chapter 11 plan drew an objection from an informal group of lenders, according to documents filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

The company asked the court to extend the exclusive plan filing period through Nov. 22 from Oct. 6 and the exclusive solicitation period through Dec. 22 from Oct. 31.

The lender group, which represents about $2.4 billion in claims filed against Genesis Global, said it does not support the agreement in principle reached with parent company Digital Currency Group and the official committee of unsecured creditors regarding the terms of a Chapter 11 plan.

The group said that at the request of the debtors and committee, it submitted statements signed by creditors holding more than $3.5 billion in claims, including greater than 80% of the voting claims in each potential class, which provide that such creditors (a) do not support, and “vehemently oppose,” the agreement in principle, (b) do not support the filing of a toggle plan based on the agreement in principle, (c) would support a plan centered around certain revised terms delivered by the informal lender group and would be prepared to execute a restructuring support agreement to that effect, and (d) if no agreement were reached on a revised proposal, would support a Chapter 11 plan centered on the immediate distribution of current assets and the prosecution of retained claims and causes of action.

“The path forward is clear. The debtors have squandered their exclusive opportunity to propose and solicit a Chapter 11 plan that would receive sufficient creditor support,” the lender group said in the objection.

“Rather, already knowing the creditors’ perspective, the debtors (with the seeming support of the UCC) still choose a path doomed to fail.”

Genesis Global is a New York-based cryptocurrency lender. The company filed bankruptcy on Jan. 19, 2023 under Chapter 11 case number 23-10063.

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