Crypto Titan Digital Currency Group Opposes Genesis’ Restructuring Plan for Favoring Select Creditors

In a authorized doc filed on Feb. 6, 2024, the crypto juggernaut, Digital Currency Group (DCG), voiced opposition to Genesis’ revised chapter technique for a number of considerations. DCG argues that the plan favors sure collectors over others unjustly, and the corporate’s authorized group expenses Genesis with violating their fiduciary duties and presenting the proposal in unhealthy religion.

DCG Raises Legal Concerns Over Genesis’ Bankruptcy Strategy, Seeks Plan Rejection

Attorneys from Weil, Gotshal, and Manges LLP, representing Digital Currency Group (DCG), have lodged a proper objection towards Genesis‘ up to date chapter scheme, alleging it contravenes Section 1129 of the Bankruptcy Code. DCG argues the plan constitutes an impermissible “cramdown” that fails to align with authorized requirements for chapter, purportedly permitting collectors to say recoveries exceeding the values assessed on the submitting date, amongst different infractions. Adding to the complexity, Genesis operates beneath the DCG umbrella.

DCG additional argues that the scheme’s allocation guidelines are overly intricate and muddled, breaching sure established norms of chapter laws. The firm maintains that these guidelines disproportionately profit a choose group of collectors on the expense of others, successfully depriving DCG of serious monetary and governance rights. The authorized group deems the preferential remedy of sure collectors by means of setoff guidelines and the modification of DCG’s rights as an fairness holder to be towards the regulation.

“The amended plan also seeks to disenfranchise DCG in a myriad of other ways, including stripping DCG of essentially all its rights in its capacity as an equity holder with no legal authority to do so,” the courtroom submitting particulars. “In short, the amended plan renders DCG an equity holder in name only. This kind of naked seizure of equity holder rights in direct contravention of law and public policy is the very definition of bad faith.”

The DCG attorneys add:

Because the amended plan was not proposed in good religion and violates quite a few ideas of regulation, it needs to be rejected.

DCG’s objection comes on the heels of Genesis seeking authorization to dump $1.4 billion in Grayscale’s Bitcoin Trust (GBTC). This transfer was promptly lauded by the New York-based Gemini, which referred to as it an “important step” towards settling. In the courtroom doc filed on Tuesday, DCG expressed disapproval of the method used to craft the revised plan, criticizing it as the result of alleged secretive talks that left DCG out and unjustly advantaged sure collectors to the detriment of DCG.

What do you consider DCG’s objection to Genesis’ amended chapter plan? Share your ideas and opinions about this topic within the feedback part under.