DCG Opposes Genesis’ Restructuring Plan for Favoring Select Creditors

In a recent legal development, digital currency giant Digital Currency Group (DCG) has expressed strong opposition to Genesis’ revised bankruptcy strategy. DCG’s legal team has filed a formal objection, claiming that the proposed plan unfairly favors certain creditors over others and violates fiduciary responsibilities. They argue that Genesis’ strategy violates Section 1129 of the Bankruptcy Code and fails to align with established legal standards. Furthermore, DCG asserts that the allocation rules of the plan disproportionately benefit a select group of creditors, compromising DCG’s financial and governance rights. DCG’s objection highlights concerns about the plan’s legitimacy and seeks its rejection based on numerous violations of law and principles. This objection comes as Genesis seeks court approval to sell off $1.4 billion worth of Grayscale’s Bitcoin Trust assets.

DCG Raises Legal Concerns Over Genesis’ Bankruptcy Strategy, Seeks Plan Rejection

Attorneys from Weil, Gotshal, and Manges LLP have been enlisted by Digital Currency Group (DCG) to express their opposition to Genesis’ revised bankruptcy strategy. DCG asserts that the plan unfairly favors certain creditors at the expense of others and accuses Genesis of violating its fiduciary responsibilities by presenting the proposal in bad faith.

Attorneys from Weil, Gotshal, and Manges LLP Represent DCG

DCG has sought legal representation from the reputable law firm Weil, Gotshal, and Manges LLP in order to mount its objections against Genesis’ updated bankruptcy scheme.

DCG’s Objection Against Genesis’ Updated Bankruptcy Scheme

DCG has formally objected to Genesis’ revised bankruptcy strategy, citing multiple concerns regarding its fairness and adherence to legal standards.

Violation of Section 1129 of the Bankruptcy Code

One of the primary legal concerns raised by DCG is the alleged violation of Section 1129 of the Bankruptcy Code by Genesis. DCG argues that the plan constitutes an impermissible “cramdown” and fails to align with the legal standards established for bankruptcy proceedings.

Impermissible ‘Cramdown’ Contrary to Legal Standards

According to DCG, Genesis’ plan allows creditors to claim recoveries that exceed the assessed values at the filing date, which is considered an impermissible “cramdown” under the bankruptcy laws.

Recoveries Exceeding Assessed Values at Filing Date

DCG asserts that Genesis’ strategy enables creditors to obtain recoveries that surpass the values assessed at the time of filing. This discrepancy raises concerns about the fairness of the plan and its compliance with legal standards.

DCG Argues Unfair Allocation Rules

DCG argues that the allocation rules outlined in Genesis’ bankruptcy scheme are overly complex and lack clarity. These intricate rules allegedly breach established norms of bankruptcy legislation, contributing to the unfair treatment of certain creditors.

Complexity and Lack of Clarity in the Scheme’s Allocation Rules

DCG contends that the allocation rules set forth in the revised bankruptcy plan are unnecessarily complex and lack clarity. This complexity makes it difficult to ensure fair treatment for all creditors involved.

Breaching Established Norms of Bankruptcy Legislation

The allocation rules proposed by Genesis have raised concerns about their adherence to established norms of bankruptcy legislation. DCG argues that these rules unfairly benefit a select group of creditors while disadvantaging others.

Disproportionate Benefits for Select Creditors

DCG takes issue with the alleged preferential treatment given to select creditors under Genesis’ bankruptcy plan. This preferential treatment comes at the expense of other creditors and results in a disproportionate distribution of benefits.

Claims of Benefiting a Select Group of Creditors at the Expense of Others

According to DCG, Genesis’ bankruptcy strategy unfairly favors a select group of creditors, depriving others of their fair share. This lopsided distribution of benefits raises concerns about the plan’s integrity and adherence to legal standards.

Deprivation of DCG’s Financial and Governance Rights

DCG argues that Genesis’ plan significantly deprives them of their financial and governance rights. The plan’s modification of DCG’s rights as an equity holder is viewed by DCG as a violation of both the law and public policy.

Amendment’s Impact on DCG’s Rights as an Equity Holder

The proposed amendment to the bankruptcy plan has significant consequences for DCG’s rights as an equity holder. DCG contends that these changes go against established legal principles and public policy.

Violation of Law and Public Policy

DCG maintains that the modification of their rights as an equity holder violates both legal principles and public policy. The plan’s disregard for DCG’s rights is seen as a direct contravention of established laws and ethical standards.

DCG Rendered an Equity Holder in Name Only

DCG argues that the amended plan reduces them to the status of an equity holder in name only. The severe limitation and potential loss of their rights further underscore the plan’s alleged violations of the law and public policy.

The Plan’s Attempt to Disenfranchise DCG

DCG raises concerns about the plan’s attempt to disenfranchise them by stripping away their rights and privileges as an equity holder. This perceived disenfranchisement is viewed as an unjust action that undermines DCG’s interests.

Opposition to the Proposed Amended Plan

DCG takes a firm stance against Genesis’ amended bankruptcy plan, viewing it as a naked seizure of equity holder rights. The plan’s violations of the law and public policy prompt DCG to oppose its implementation.

Violation of Law and Public Policy

DCG objects to the amended plan on the grounds that it violates established legal principles and public policy. The plan’s disrespectful treatment of equity holders is seen as antithetical to the ideals and standards upheld by the legal system.

DCG’s Request to Reject the Amended Plan

DCG formally requests the rejection of the amended bankruptcy plan proposed by Genesis. The objections raised by DCG, citing legal concerns and violations, underscore the need for the plan to be reconsidered.

DCG’s Disapproval of the Process Used to Craft the Revised Plan

DCG expresses strong disapproval of the process used by Genesis to craft the revised plan. DCG asserts that the plan was devised during secretive talks that excluded their input, resulting in an unjust advantage for certain creditors at their expense.