Genesis is asking the court for permission to decrease Three Arrows Capital's claim from $1 billion to $33 million.
The bankrupt lender Genesis has requested court approval for its proposed settlement deal with the collapsed crypto hedge fund 3AC.
Bankrupt crypto lender Genesis has sought court approval for a settlement agreement with the collapsed crypto hedge fund Three Arrows Capital (3AC). Genesis proposes a reduced claim of $33 million for 3AC, down from the initially asserted $1 billion. The agreement aims to absolve Genesis from over $1 billion in claims made by 3AC against the Genesis debtors in Chapter 11 cases linked to FTX exchange's collapse.
The filing highlights that 3AC was among Genesis's major borrowers until its collapse, having made the largest claims in the associated Chapter 11 cases. As part of the proposed settlement, Genesis intends to surrender any remaining claims and rights to AVAX and NEAR tokens in favor of the 3AC debtor. This arrangement includes mutual liability releases between the two parties but doesn't affect claims against DCG held by Genesis debtors.
The lender stressed the importance of the settlement for its Chapter 11 reorganization and to minimize risks and expenses linked to legal disputes. The proposed settlement's advantages include facilitating the confirmation of Genesis's Chapter 11 reorganization plan and eliminating potential costs and uncertainties tied to prolonged litigation.
The proposed agreement has been submitted to the U.S. Bankruptcy Court for the Southern District of New York, pending approval from Judge Sean Lane. Creditors have the opportunity to contest the settlement until November 24, with a hearing scheduled for November 30.
This development occurs almost a year after the collapse of the FTX exchange, which triggered a significant downturn in the crypto industry. Genesis and 3AC are just two of the entities affected by the FTX collapse, with Genesis's derivatives business losing access to $175 million locked on the platform.
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