A voluntary Chapter 11 restructuring of the lender’s business will begin to further advance ongoing stakeholder discussions and improve outcomes for Genesis customers and Gemini’s revenue beneficiaries.
A Chapter 11 plan contemplates a sale and/or foreclosure transaction to allow the debtor’s business to emerge under new ownership.
Restructuring process led by an independent special committee of the board of directors
Genesis’ derivatives and spot trading, broker-dealer and securities businesses are not part of Chapter 11. And continue customer marketing activities
Sufficient liquidity of more than 150 million dollars to support operations and facilitate the restructuring process
New York, January 20, 2023–(BUSINESS WIRE)–Genesis Global Holco, LLC (“Genesis”, “GGH” or the “Company”), an industry pioneer and leading digital currency broker, today announced strategic initiatives to achieve a global commitment to maximize value for all. customers and stakeholders and strengthen the business for the future.
As previously stated, Genesis and its advisors have been engaged in ongoing productive discussions with creditors and corporate parent Digital Currency Group (“DCG”) to evaluate the most effective way to protect assets and move the business forward. Genesis has now initiated a court-monitored restructuring process to further advance these discussions and reach a comprehensive resolution for its lending business, which, if successful, will benefit Genesis’ customers and Gemini’s revenue beneficiaries.
Genesis Global Holdco, LLC (“GGH”) and its two lending businesses, Genesis Global Capital, LLC (“GGC”) and Genesis Asia Pacific Pte. Ltd. (“GAP”), filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the Southern District of New York (the “Court”). Genesis’ other subsidiaries in distribution and spot trading and custody businesses and Genesis Global Trading were not included in the filing and continued customer trading operations.
As part of its Chapter 11 filing, Genesis has provided an exit roadmap, including a Chapter 11 plan (the “Plan”), which will result in a global settlement of all claims and the creation of a trust. Distribution of assets to creditors. The plan envisages a two-track process for pursuing a sale, capital increase and/or offsetting transaction that will allow the business to emerge under new ownership. The Company will initiate a transaction and sale process to monetize or otherwise raise capital of GGH’s assets, with the proceeds of the transaction to pay creditors fairly and equitably. If the transaction does not result in a sale or capital increase, the creditors will receive ownership interests in the reorganized GGH.
All aspects of the restructuring process will be overseen by an independent special committee of the company’s board of directors.
While we have made significant progress in refining our business plans to address the liquidity challenges caused by the extraordinary challenges in our industry, including the Three Arrows Capital default and the FTX bankruptcy, in-court restructuring represents the most effective path forward. to protect assets and create the best outcome for all Genesis stakeholders,” said interim CEO Derar Islam. “We sincerely appreciate our customers’ continued patience and cooperation as we work to find a just resolution.”
Derar Islam has been appointed to the position in August 2022 as part of a series of leadership announcements to further strengthen the company’s management and position it for the future.
“We have developed a deliberate process and roadmap that we believe will deliver the best solutions for customers and other stakeholders,” said Genesis Independent Director Paul Aronzon. “We look forward to progressing our discussions with DCG and our lenders’ advisers as we seek to maximize value and give our business the best opportunity to be well positioned for the future.”
Genesis has more than $150 million in cash on hand, which will provide sufficient liquidity to support ongoing business operations and facilitate the restructuring process. The company filed several customary “day one” motions with the court to ensure that day-to-day operations continue as normal. Court approval for these requests is expected in the coming days. Redemptions in the loan business and new sources of credit remain frozen and claims are dealt with in the Chapter 11 process. Genesis and its advisors will continue to evaluate options to advance the process to reach a global solution.
Additional information on Chapter 11 filings, including access to court documents, is available at https://restructuring.ra.kroll.com/genesis.
Moelis & Company is acting as the Company’s financial advisor. Cleary Gottlieb Steen & Hamilton LLP is acting as legal counsel. Alvarez & Marsal are serving as restructuring advisors.
About Genesis
Genesis is a full-service digital currency prime broker that provides a single point for selected qualified individuals and global institutional investors. Genesis combines unmatched operational excellence, seamless user experience and best-in-class customer service to provide global investors with the full range of services they need to manage their digital asset portfolios.
The firm provides sophisticated market participants with a fully integrated platform to trade, borrow, lend and hold digital assets, creating new opportunities for leveraged partners by increasing capital efficiency.
For more information about Genesis, please visit genesistrading.com.
Check out the source version at businesswire.com: https://www.businesswire.com/news/home/20230119005955/am/
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