Bankrupt cryptocurrency lender Genesis has asked the court to approve its proposed settlement with imploded cryptocurrency hedge fund Three Arrows Capital (3AC).
According to court documents filed on Nov. 9, Genesis argued that the 3AC debtors should be entitled to $33 million in allowed general unsecured claims against Genesis. The amount represents 3.3% of the $1 billion originally filed against Genesis debtors.
“The agreement provides that the 3AC Debtors shall receive $33 million of permitted general unsecured claims against GGC to fully satisfy claims in excess of $1 billion asserted against each of the Genesis Debtors,” the filing reads.
According to Genesis, 3AC’s $1 billion claim against Genesis is the largest claim in a Chapter 11 case related to the collapse of the FTX exchange. Genesis highlighted that 3AC Debtor was one of Genesis’ largest borrowers from 2020 to 2022 until its collapse.
Additionally, Genesis wishes to waive all of its claims and rights to Avalanche (AVAX) tokens and Near Protocol (NEAR) tokens in favor of the 3AC debtors. The proposed settlement agreement states that the bankrupt company should relinquish any remaining liabilities, stating:
“As set forth in greater detail in the Settlement Agreement, the Genesis Debtors and 3AC mutually release each other from liability; the Genesis Debtors expressly retain and will not otherwise waive any and all claims they may have against DCG.”
The lender said the settlement was necessary to provide a smooth path to its Chapter 11 reorganization plan and reduce the potential risks and expenses of litigation.
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“In addition to other benefits to the Genesis Debtors’ estates, the proposed settlement will significantly simplify the path to confirmation of the Genesis Debtors’ Chapter 11 reorganization plan, make distributions expeditiously, and eliminate the risks, expenses and risks associated with protracted litigation. Uncertainty. Between the parties,” the document reads.
The proposed settlement has been filed with the U.S. Bankruptcy Court for the Southern District of New York and requires approval by Judge Sean Lane. Creditors have until Nov. 24 to object to the settlement, and a hearing is scheduled for Nov. 30.
The news comes on the anniversary of the collapse of the FTX exchange a year ago, which plunged the cryptocurrency industry into a massive bear market. Genesis and 3AC were just a few of the many companies affected by the failure of FTX as the platform collapsed, with Genesis’ derivatives business losing $175 million in funds locked on FTX.
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