Genesis’ Clash With FTX Over Funds Likely to Delay its Creditor Payout: Report
According to US Bankruptcy Judge Sean Lane, Genesis, whose repayment plan was pending approval, will first have to resolve its outstanding issues with FTX.
The announcement came mere hours after Cameron Winklevoss’ ultimatum to DCG CEO Barry Silbert expired, meaning yet another lawsuit against Genesis’ parent company is also on the horizon. A response to said ultimatum, which would have forced DCG to stick to a repayment plan, may now be out of DCG’s control to begin with.
Awfully Optimistic
During a preliminary hearing concerning Genesis’ creditor repayment plan, Manhattan-based Bankruptcy Judge Sean Lane stated that any further hearings regarding this proposal are likely to be delayed until the firm’ legal dispute with FTX was resolved, according to Bloomberg.
“That schedule is looking awfully optimistic. My understanding is these deadlines were likely to slip.”
However, a final ruling on the payment plan is still not out of the question. The two parties proposed “duel procedures” in order to settle FTX’s claim, a request that was denied by Judge Lane.
Also rejected by the judge were a second request from FTX to sue Genesis in a Delaware court and another from the former for a hearing to decide whether the claim is legitimate in the first place.
Right to Confidentiality
Genesis’ debt to FTX has been outright denied by the company in earlier hearings with Judge Lane, who outright refused access to its confidential mediation sessions to the exchange’s legal counsel.
“There will be a certain amount of radio silence because mediation needs that to work. Shortening the mediation does not shorten the case.”
FTX originally claimed that Genesis owed it nearly $4 billion, a claim which has since been revised to only $2 billion. This, in turn, indicates that FTX is overestimating the scope of its business deal with its fellow crypto lending platform at best and simply grasping at straws at worst. As far as Genesis is concerned, FTX “is entitled to claims totaling $0.00.”
Judge Lane has ordered the two platforms to exchange information regarding the alleged debt and to report back at a later date. Until then, the court will refrain from ruling on whether FTX is even allowed to sue Genesis in the first place.
Once the parties have exchanged the necessary information, the court may schedule the hearing requested by Genesis regarding the size of its debt to FTX – assuming it exists in the first place.
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