On January 23, the first hearing in Genesis Capital’s bankruptcy case will take place in the United States Bankruptcy Court for the Southern District of New York.
At the hearing, Judge Sean H. Lane will decide whether to accept the relief requested under Chapter 11 bankruptcy.
The companies have requested a joint administration of the case and the appointment of a committee of unsecured creditors, which will have the right to demand consultation before any major decisions are made.
Genesis Capital and its two lending business subsidiaries filed for bankruptcy protection on January 19, citing liabilities up to $10 billion.
This came after Genesis announced a $175 million exposure to FTX and liquidity issues in November. The companies are proposing a reorganization plan and a dual track process, which will involve the sale, capital raise, and/or an equitization transaction.
These measures would enable the business to emerge under new ownership. The plan also includes the creation of a trust that would distribute assets to creditors.
Digital Currency Group (DCG), Genesis Capital’s parent company, has denied involvement in the bankruptcy filing and claimed that a special committee of independent directors recommended and decided to file for Chapter 11 protection. Only Genesis’ lending entities have filed for bankruptcy protection.
