- The crypto lender has decided to settle out of court to avoid the risks and expenses.
- Genesis has proposed lowering the claim and giving up rights to certain crypto assets.
Bankrupt cryptocurrency lender Genesis has taken a bold step towards streamlining its Chapter 11 reorganization. The company has asked the court for permission to drastically decrease the claim of the bankrupt hedge fund Three Arrows Capital (3AC) from over $1 billion to $33 million. The proposed resolution is an important milestone on the road to financial stability for Genesis after its reorganization.
As part of its effort to renegotiate its debt with 3AC, Genesis has proposed lowering the claim and giving up rights to certain crypto assets. Genesis will give up its rights to a number of AVAX and NEAR tokens that are not specified in the deal.
Following a similar resolution with the defunct cryptocurrency exchange FTX, the lender is demonstrating its dedication to resolve its biggest outstanding claims.
Settling Major Claims Outside Court
Genesis has decided to settle out of court to avoid the risks and expenses of protracted litigation. This method should make the Chapter 11 reorganization procedure easier and more effective. After settling its major claims, Genesis will be in a better position to make timely payouts and resume growth.
A final decision on the settlement offer is pending before Judge Sean Lane of the United States Bankruptcy Court for the Southern District of New York. The deadline for other creditors like Gemini to file objections is November 24; a hearing has been set on November 30. Before the details of the settlement are finalized, the parties will have an opportunity to address them during this hearing.
Genesis has taken a major step forward in its continuing reorganization efforts with the proposed settlement it has reached with 3AC. By writing down its biggest claim and giving up certain assets, the lender hopes to speed up its journey to financial stability.
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