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Genesis’ Dispute with FTX Regarding Finances Expected to Postpone Creditor Disbursement: Report
As stated by US Bankruptcy Judge Sean Lane, Genesis, which is awaiting approval for its repayment plan, must first address its unresolved matters with FTX.
This announcement followed shortly after the expiration of Cameron Winklevoss’ ultimatum to DCG CEO Barry Silbert, indicating that another lawsuit against Genesis’ parent company may be forthcoming. A response to the ultimatum, which would have compelled DCG to adhere to a repayment plan, may now be beyond DCG’s control from the outset.
Exceedingly Optimistic
In a preliminary hearing regarding Genesis’ creditor repayment plan, Bankruptcy Judge Sean Lane from Manhattan indicated that any additional hearings concerning this proposal are likely to be postponed until the company’s legal conflict with FTX is settled, as reported by Bloomberg.
“That schedule is looking exceedingly optimistic. My understanding is these deadlines were likely to slip.”
Nonetheless, a conclusive ruling on the payment plan is still a possibility. The two parties suggested “dual procedures” to resolve FTX’s claim, a request that Judge Lane denied.
The judge also dismissed a second request from FTX to initiate a lawsuit against Genesis in a Delaware court, as well as another request from FTX for a hearing to determine the legitimacy of the claim in the first instance.
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Right to Confidentiality
Genesis has categorically denied its debt to FTX in previous hearings with Judge Lane, who denied access to its confidential mediation sessions for the exchange’s legal representatives.
“There will be a certain amount of radio silence because mediation needs that to work. Shortening the mediation does not shorten the case.”
Initially, FTX asserted that Genesis owed it nearly $4 billion, a claim that has since been adjusted to approximately $2 billion. This suggests that FTX may be either overestimating the extent of its business arrangement with the crypto lending platform or simply clutching at straws. From Genesis’ perspective, FTX “is entitled to claims totaling $0.00.”
Judge Lane has instructed both platforms to share information regarding the alleged debt and to report back at a later date. Until that time, the court will refrain from determining whether FTX is permitted to sue Genesis at all.
Once the parties have exchanged the required information, the court may arrange the hearing requested by Genesis concerning the magnitude of its debt to FTX – assuming it exists in the first place.
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