(Bloomberg) -- Bankrupt cryptocurrency lender Genesis Global Holdco LLC and a key creditor group have agreed to meet with a mediator in an effort to save a proposed bankruptcy exit plan backed by the company’s parent, Digital Currency Group.
Genesis lawyer Sean O’Neal said Friday that the crypto lender has agreed to a 30-day mediation period including its committee of unsecured creditors, which has opposed the proposed restructuring deal. Genesis is hoping to hold two “substantive” mediation sessions before May 8, O’Neal said. Final terms of the deal will also be made public when mediation is terminated, he said.
Genesis and the committee still need to pick a mediator who will oversee the discussions. O’Neal told Judge Sean Lane that they have started reaching out to a list of mediators and will submit an order to the court outlining the process once a mediator is picked.
The creditors committee is opposed to Genesis’s current restructuring proposal and is seeking better terms, Bloomberg News has reported. Philip Abelson, a lawyer representing the creditors committee, said his client’s position hasn’t changed “and we do not want our participation in the mediation to be misconstrued.”
Still, Judge Lane called news that the parties had agreed to mediation “significant progress.”
“Obviously folks are doing a lot of work, heavy lifting to get things moving along,” Lane said.
Genesis Global Holdco’s lawyers submitted a term sheet in February outlining a settlement with creditors that suggests DCG would shoulder a major burden in the bankrupt crypto lender’s restructuring. The arrangement had initially been supported by creditors representing more than $2 billion of claims against Genesis, including Gemini Trust Co.
Genesis’s lending arm filed Chapter 11 protection in January following the collapse of crypto exchange FTX, which prompted a wave of “unprecedented” withdrawals that prompted Genesis affiliates to pause lending and borrowing.
The company next appears in bankruptcy court on May 4.
(Adds Lane quote in sixth paragraph and court date in final paragraph. A previous version of this story corrected the spelling of Genesis in the final paragraph.)
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