Crypto lender Genesis and its key creditor group have agreed to a 30-day mediation process in an attempt to move forward with a final restructuring plan, though one company is expressing “frustration” over the pace of progress.
On April 30, Gemini tweeted that Genesis, its parent company Digital Currency Group (DCG), its Unsecured Creditors Committee (UCC) and Gemini have agreed to a 30-day mediation process in court on April 28.
Gemini said its aim is to “drive to a final resolution as soon as possible,” and that it was “supportive” of mediation. Gemini, however, added it had “expressed our frustration” regarding “the pace of progress among the parties and the need for urgency.”
2/ Gemini is supportive of mediation and working with the parties to bring this to a conclusion. We have also expressed our frustration on the record on the pace of progress among the parties and the need for urgency. The next status conference with the Court will be on May 4th.
— Gemini (@Gemini) April 30, 2023
The mediation is to move forward on a proposed bankruptcy exit plan submitted in February that expected creditors to recover 80% of lost funds. The plan is backed by DCG but the UCC opposed the restructuring deal, wanting better terms.
Genesis is slated to next appear in bankruptcy court on May 4. Sean O’Neal, a lawyer for Genesis, said in court on April 30 that it hopes to have two mediation sessions before May 8, with the deal’s final terms made public after the mediation period.
A mediator will need to be selected by Genesis and the UCC. O’Neal said potential mediators have started to be contacted and the process will be outlined to the court once one is selected.
On April 25, DCG expressed its thoughts on the matter when Genesis filed its motion for mediation.
DCG Statement on Genesis filing Motion for Mediation: pic.twitter.com/pRluUnL49C
— Digital Currency Group (@DCGco) April 25, 2023
The crypto conglomerate said the settlement would “prolong the court process” due to the renewed demands and added it was “difficult to understand the rationale” of Genesis creditors as they had given “limited engagement” since the plan proposed in February.
Genesis filed for Chapter 11 bankruptcy in a New York District Court in January, estimating its liabilities were between $1 billion and $10 billion with assets in the same range.
The crypto lender was one of several firms hit by liquidity issues in the wake of the collapse of FTX.