Genesis Global reaches ‘monumental’ settlement with Gemini, lenders

By Sarah Lizee

Olympia, Wash., March 19 – Genesis Global Holdco, LLC is seeking approval of a settlement with Gemini Trust Co., LLC, an informal group of lenders and the official committee of unsecured creditors, according to a motion filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Genesis called the settlement a “truly monumental achievement” that resolves all Gemini-related issues in the Chapter 11 cases and paves the way to near-term recoveries of about 97% on an in-kind basis to the Gemini lenders.

More specifically, the settlement provides for the near-full near-term payment, on an in-kind “coin-for-coin” basis, of the Gemini lender claims through a combination of the following:

• Cash of digital assets holding a cumulative value equivalent to $50 million contributed directly by Gemini;

• Value up to $50 million that may be contributed directly by Digital Currency Group, Inc. (DCG) or will be passed through to the Gemini lenders by the debtors as a percentage of any amounts ultimately recovered by the debtors from DCG, whether through litigation, settlement or otherwise;

• A distribution from the debtors’ estates of cash, currently estimated at about $114 million in value;

• The proceeds of pledged Gemini Grayscale Bitcoin Trust (GBTC) shares;

• A distribution from the debtors’ estates of Alt-Coins that are included in the Gemini Master Claim, currently estimated at about $83 million in value; and

• Release by the debtors of the Gemini Earn operations assets, currently estimated at about $19 million in value.

The company said the settlement will facilitate the debtors’ efforts to maximize in-kind recoveries for all of the debtors’ creditors under the plan, including by preserving the debtors’ Bitcoin and Ethereum for future distributions to other constituents under the plan.

As part of the settlement, Gemini will also release any asserted lien, security interest or constructive trust claims with respect to the additional GBTC shares; assign to the debtors all claims and causes of action asserted by Gemini against DCG; reduce the Gemini proprietary claim (originally asserted for more than $20 million plus other amounts) to a fixed amount equal to $7.5 million; and indemnify the debtors from any claims and causes of action asserted by the Gemini lenders.

Genesis Global is a New York-based cryptocurrency lender that filed bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Jan. 19, 2023 under Chapter 11 case number 23-10063.

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