Crypto.news – Genesis Global is taking their parent company, Digital Currency Group (DCG), to court to recover $620 million in unpaid loans amid ongoing bankruptcy proceedings and settlement talks.
The lawsuit was submitted to a New York bankruptcy court on Wednesday, Sep. 6. According to the claims of Genesis, the debt includes a $500 million loan to DCG and another to DCG International Investments Ltd., worth roughly 4,550 Bitcoin (BTC). Additionally, the lawsuit aims to collect accrued interest and late fees.
A DCG representative told Bloomberg that “the action to freeze the turnover has been mutually deferred so that a formal agreement, agreed upon in principle among Genesis, the UCC [Unsecured Creditors Committee], and DCG, can be thoroughly documented.”
The repayment of these loans will only be possible when a formal standstill agreement is officially drafted and presented to the bankruptcy court.
Earlier this year, Genesis Global filed for Chapter 11 bankruptcy protection, joining a number of crypto enterprises with insolvency issues. In August, the company proposed a repayment plan of $1.4 billion, but it has only been supported by a portion of its clients and other key creditors remain opposed.
Genesis has put forward a resolution which could allow unsecured creditors to recover up to 90% of their investments. However, for this plan to move forward, it is essential to get the approval of the key dissenting parties, like crypto firm Gemini Trust Co.
DCG, in its defense, declared that the proposed restructuring plan lays the groundwork for addressing ongoing concerns in the Genesis Chapter 11 proceedings. According to their statement, this framework could greatly benefit their creditors by facilitating substantial recoveries.
This article was originally published on Crypto.news.