The FTX debtors contended that the claim was submitted “without prior notification,” and they were excluded from the mediation proceedings
Within a month of FTX, the bankrupt cryptocurrency exchange, pursuing a $4 billion claim against the bankrupt crypto lender Genesis, it is currently challenging a claim asserting that it holds no entitlement.
In a court filing dated June 2, submitted to the United States Bankruptcy Court for the Southern District of New York, the FTX debtors raised objections to Genesis’ assessment that their claims amount to “$0.00.” This estimation was disclosed by Genesis in a motion for estimation procedures filed on June 1. The FTX debtors further asserted their lack of involvement in the mediation process and stated that they received no prior notification before the motion was filed.
Contrary to Genesis’ assertion in the Estimation Procedures Motion that they are actively collaborating with all relevant parties to develop a plan structure, the FTX debtors have disputed this claim by pointing out that they were not included in the mediation process.
The Genesis debtors emphasized the importance of the zero-dollar claim estimation, as stated in the motion, describing it as “critical” to avoid any delays and expedite the progress towards the “confirmation of a Chapter 11 plan.”
June 2 court filing in the U.S. Bankruptcy Court for the Southern District of New York. Source: U.S. Bankruptcy Court
The filed document additionally contended that the FTX debtors hold the position of being the largest unsecured creditors in the Genesis Debtors’ Chapter 11 cases. It stressed the significance of their participation in the mediation process, stating, “The mediation, in the absence of the FTX Debtors’ involvement, would squander estate resources and should not proceed.”
Also Read This Related: FTX Bankruptcy Case Referred to US Appeals Court for an Impartial Investigation
Just a month ago, on May 3, FTX’s legal representatives pursued a claim of nearly $4 billion from Genesis, utilizing bankruptcy laws that permit the recovery of “avoidable transfers” made within a 90-day timeframe prior to a company’s bankruptcy declaration.
In a customary procedure following a firm’s bankruptcy filing, the FTX debtors have submitted a motion requesting relief from the automatic stay. This motion seeks the court’s intervention to lift the suspension on legal proceedings against Genesis.
The court is scheduled to review and hear the motion on June 15th
Following Genesis’s parent company, the Digital Currency Group (DCG), stating its inability to address the unresolved intercompany obligations that could aid in compensating creditors, a mediation period ensued with Genesis in response to creditor demands.
In February, the company had proposed a settlement plan envisioning an 80% fund recovery for Genesis creditors following the Chapter 11 bankruptcy filing.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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