Genesis Reaches Agreement in Principle With DCG and Key Creditors on a Global Resolution

Genesis​ Global Holdco, LLC (Genesis) recently announced that it has reached an agreement in principle among Digital Currency Group (DCG) and the ad hoc groups of creditors of Genesis Global Capital, LLC (the Ad Hoc Groups) which, in the aggregate, hold or represent more than $2 billion in asserted claims.

The agreement in principle lays out a framework for a global resolution that will maximize value for all Genesis clients and stakeholders.

Under the terms of the agreement, DCG would exchange its existing $1.1 billion note due in 2032 for convertible preferred stock to be issued by DCG as part of Genesis's Chapter 11 plan. DCG would also refinance its existing 2023 term loans through a new, junior secured term loan in two tranches made payable to creditors in the aggregate total value of approximately $500 million.

As part of the transactions, DCG will also contribute its equity interest in Genesis Global Trading (GGT) to Genesis Global Holdco, bringing all Genesis entities under the same holding company.

In addition, as part of the agreement, Gemini has agreed to contribute up to $100 million in additional funds to Earn users as part of the Plan.

Pending the closing of these transactions, Genesis will launch a sale process for GGT and explore other value-maximizing transactions.

"Today's agreement is a positive step forward and provides a clear path to a consensual resolution that maximizes value," said Paul Aronzon, a member of the Special Committee of Genesis's board of directors that has been spearheading the company's restructuring efforts.

On January 19, 2023, Genesis Global Holdco, LLC and two of its lending business subsidiaries, Genesis Global Capital, LLC and Genesis Asia Pacific Pte. Ltd. filed voluntary Chapter 11 petitions in the Bankruptcy Court for the Southern District of New York to achieve a global resolution to maximize value for all clients and stakeholders. Genesis's other subsidiaries involved in the derivatives and spot trading and custody businesses and GGT are not included in the filing and continue client trading operations.

(Source: Business Wire)