If Genesis Global Capital and Genesis Global Trading cannot be sold for a high enough price, the creditors could find themselves in possession of stock in the two firms.
The owner of bankrupt crypto lender Genesis Global Capital is selling both it and a sister firm, broker Genesis Global Trading, to help pay off as much of the $3.5 billion that it owes its creditors as possible.
That includes 340,000 Gemini Earn clients who have some $900 million frozen in the bankruptcy.
Filed with the court on Friday, the document adds detail to the broad outline of the plan made public on Feb. 6. While that led to estimates that creditors could back as much as 80% of their funds, it's clear that won't be soon.
Under a proposal agreed to by Genesis parent Digital Currency Group and the main creditor representative groups, the two Genesis companies will be gathered under one umbrella, Genesis Global Holdco, for eventual sale.
If they cannot be sold, or do not attract a suitable price, 100% of the equity in the holding company will go to the creditors (likely minus a management incentive plan.)
The plan also includes the restructuring of a $1.1 billion promissory note DCG gave to Genesis back in June when it first ran into trouble after suffering heavy losses following the bankruptcy of crypto hedge fund Three Arrows Capital.
That note, due in 2032, will be traded for stock in DCG, and another $526 million loan owed to Genesis by DCG will be converted into a $500 million payment to the creditors.
That promissory note was the source of a great deal of controversy, with Gemini President Cameron Winklevoss accusing DCG CEO Barry Silbert of "fraud" before the agreement was hashed out.
Beyond the proposal put before the court on Feb. 10, Winklevoss announced that the Gemini exchange will be adding $100 million to the pot for its customers.
