Venture capital firm Digital Currency Group (DCG) and its bankrupt subsidiary Genesis Global have struck a new agreement to settle an ongoing legal battle.
A new filing with the US Bankruptcy Court for the Southern District of New York says that in September, Genesis filed a lawsuit to recover approximately $627 million in loans owed to it by DCG and its affiliate DCG International Investments (DCIG) that matured in May 2023.
The court document says that the parties struck a partial repayment agreement but DCG and DCGI have only paid approximately $227.3 million to date.
Instead of terminating the agreement and commencing a costly and lengthy litigation, Genesis and DCG renegotiated and executed an amended deal on November 28th.
“The terms of the Partial Repayment Agreement, as amended, will provide immediate significant and near-term benefits to GGC and its creditors, without the risk, expense, and diversion of resources that would be required by litigation of the Turnover Actions.”
Under the new agreement, the DCG parties will follow a modified repayment schedule that requires $35 million in upfront payments and monthly installments. The goal is to settle the balance by April 1st of next year.
The debtors will also have to secure their obligations with Grayscale Ethereum Trust and Grayscale Ethereum Classic Trust shares.
“Following extensive negotiations with DCG and DCGI, and numerous consultations with the Committee and the Ad Hoc Group, the Debtors determined that entering into the Amendment would be more beneficial to the estates than terminating it.”
DCG and its CEO Barry Silbert are also facing complaints from Genesis’ former business partner, crypto exchange Gemini after the lender defaulted on the loans of Gemini Earn users.
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