Bankrupt crypto lender Genesis Global Holdco and its parent company Digital Currency Group (DCG) have petitioned the court for a mediator.
In a motion filed on Monday, Genesis said that recent discussions with its committee of unsecured creditors have made it clear that a mediator is necessary to reach a resolution on the firm’s existing reorganization plan.
Genesis requested that the mediation be scheduled immediately, given that its parent company DCG owes the firm $630 million in certain fixed-term loans that are due in the second week of May 2023.
The purpose of the mediator would be a consensual resolution rather than litigation and refinancing efforts, Genesis said in the filing.
“More than two months after all parties agreed to a comprehensive settlement that was submitted by Genesis Capital to the Bankruptcy Court, a group of Genesis Capital’s creditors have reneged and raised all-new demands,” said DCG in a statement posted to Twitter on Tuesday.
DCG Statement on Genesis filing Motion for Mediation: pic.twitter.com/pRluUnL49C
— Digital Currency Group (@DCGco) April 25, 2023
According to the firm, the “subset of creditors” that have decided to walk away from the prior agreement would likely prolong the court process.
The prior agreement was finalized in February, with Genesis agreeing to wind down its loan book, sell off assets and refinance outstanding loans with a $500 million cash infusion from DCG.
Genesis owes its creditors around $2.4 billion, according to a report from CoinDesk, and cited a total of $3.4 billion in liabilities in its bankruptcy filing.
The firm filed for Chapter 11 bankruptcy in January, roughly two months after it halted withdrawals and new loan originations citing “unprecedented market turmoil” that followed FTX’s collapse.