Genesis New Bankruptcy Plan Creates Delays, US Trustee Objects Amendments

The U.S. government said the bankruptcy plan by Genesis haf material changes and they should be reviewed again by the company.

What Happened: Crypto lender Genesis indicated in its updated bankruptcy plan that it now planned to liquidate assets and not sell them or reorganize.

The plan did not receive any support from the U.S. government, which cited a lack of important relevant information on creditor recoveries and material changes to the initial plan.

This step was likely to delay the bankruptcy process as the amended disclosure statement would require a longer notice period of 28 days, Blockworks said.

The step taken by Genesis was on the heels of New York Attorney General Letitia James filing a lawsuit against Gemini Trust Company, Genesis Global Capital and Digital Currency Group for allegedly defrauding investors of $1 billion.

The next hearing for discussing a disclosure statement was scheduled for Nov. 7, 2023. It was filed in June 2023.

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Also Read: New York Attorney General Files Lawsuit Against Genesis, Gemini, DCG For Defrauding Investors of $1B, Urges Ban

Why It Matters: “There could not be a starker example of a material change of a plan. Yet, the Debtors have provided parties and the Court with little or no time — and certainly, insufficient time as set forth under the Bankruptcy Rules — to review the materially changed terms of the plan,” U.S. Trustee William Harrington in the U.S. Bankruptcy Court in the Southern District of New York stated, reported by The Block.

Read Next: Here Are The Notable Crypto Fallouts Over The Last Two Years

The biggest change to the plan was the discharge language which was eliminated as the debtors were no longer looking for a sale of their assets, the U.S. trustee added. It did not contain information about what distributions creditors could expect under the plan and when creditors would likely receive those distributions.

Benzinga’s Future Of Digital Assets Event in New York City is scheduled on Nov.14. Attend and learn more about Genesis and many such companies whose fate is in the hands of the SEC. The gathering is seen as pivotal for the digital assets community. The event will spotlight the latest trends, innovations and challenges in the digital asset realm.

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