DCG Challenges Genesis Bankruptcy Plan, Citing Overpayments to Customers

Digital Currency Group’s Objection:

  • DCG, the parent company of bankrupt lender Genesis, objects to the proposed bankruptcy plan.
  • The plan allegedly violates the Bankruptcy Code by overpaying customers.
  • This favors a select group of creditors and strips DCG of economic and governance rights.

Overpayments and Violation of Bankruptcy Code:

  • DCG argues that the plan pays unsecured creditors more than their legal entitlements.
  • This violates the Bankruptcy Code’s requirements for confirming a cramdown plan.
  • The plan allows certain unsecured claims to grow exponentially with the value of Genesis’ assets, unfairly favoring senior creditors.

Clandestinity and Lack of Good faith:

  • DCG alleges that the bankruptcy plan was developed in a “clandestinity process” excluding Digital Currency Group.
  • The UCC and Ad hoc Group collaborated with Genesis to create a plan that favors general unsecured creditors and disregards the interests of the company’s stakeholders.
  • This violates the Debtor’s Fudiciary Duties and demonstrates a lack of good faith.

Unrecognized Post-Petiton Rates and Diminished Interests:

  • The plan includes post-petiton interest rates not recognized by the court, further diminishing DCG’s interests.
  • Restrictions on DCG’s rights as the company’s owner further disadvantage the company.

Call for Rejection and Fair Resolution:

  • DCG urges the court to rejects the proposed plan as it violates the Bankruptcy Code and was not proposed in good faith.
  • DCG requests a fair and equitable resolution that adheres to the requirements of the Bankruptcy Code.