: Genesis Reaches Restructuring Deal with Creditors, Gemini to Contribute $100M
23. Februar 2023Key Points
- Genesis Global Trading, a subsidiary of Digital Currency Group, has reached a restructuring agreement with key creditors.
- The terms of the agreement will include two tranches of debt and the issuance of convertible preferred stock.
- Gemini President Cameron Winklevoss has also stated that they will contribute up to $100 million more for the recovery of Earn users.
Restructuring Agreement Reached
Genesis, a subsidiary of Digital Currency Group, has reached a restructuring agreement with key creditors according to statements by Cleary Gottlieb attorney Sean O’Neal. The deal would see the sale of Genesis Global Trading and other moves designed to „maximize the recoveries to the estate.“
The lending arm of Genesis was forced to halt withdrawals in November 2022 after FTX’s collapse earlier that same month. The company filed for bankruptcy last month, with lawyers expecting a deal with creditors by the end of January 2023. This led to withdrawals being frozen for Gemini Earn users as well.
Terms Of Restructuring
According to O’Neal, within the plan there will be two tranches: one denominated in U.S. dollars paying 11.5% interest, and another denominated in bitcoin paying 5% interest. DCG has also agreed to issue a type of convertible preferred stock; however specifics are still being determined.
In addition, Digital Currency Group owes debt to Genesis Holdco (the legal entity which previously filed for Chapter 11 protection). This debt is part of the restructuring under this agreement; it includes a second lien term loan facility maturing on June 2024.
Gemini Contribution To Recovery Efforts
Cameron Winklevoss expressed his displeasure at Gemini Earn user not having access to their funds through a letter posted on Twitter before today’s hearing. During this hearing he tweeted that Gemini will contribute up to $100 million more for these users‘ recovery efforts.