Genesis Global’s parent company objects to Chapter 11 plan

By Sarah Lizee

Olympia, Wash., Feb. 6 – Genesis Global Holdco, LLC’s Chapter 11 plan drew an objection from parent company Digital Currency Group, Inc., according to documents filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

The parent company said the amended plan proposes to grant general unsecured creditors “all the upside” from the increasing market value of the estates’ digital assets through valuation dates and interest rates prohibited by the bankruptcy code.

Digital Currency Group said the plan goes further to give some favored creditors an even greater distribution through the “lopsided setoff principles” that minimize the favored creditors’ obligations to the estates while maximizing their payout.

Some creditors will be paid a premium, the parent company said, while equityholders receive nothing.

“The debtors, in concert with the [official committee of unsecured creditors] and ad hoc group, have devised a cramdown plan that pays unsecured creditors hundreds of millions of dollars more than the full amount of their petition date claims – and which disproportionately favors a small controlling group of creditors over others – in violation of the bankruptcy code,” Digital Currency Group said in the objection.

Digital Currency Group said the plan also strips it of other valuable economic and corporate governance rights, further violating the bankruptcy code and demonstrating a lack of good faith.

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

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