DCG facing potential losses? Creditor opposition emerges, claiming total of $2.4 billion in claims

DCG announced on Tuesday that it had reached an agreement with Genesis creditors to recover more than 70% of its assets. However, it is now reported that some creditors have come forward to oppose the settlement, claiming that the proposed repayment is "completely insufficient," and have filed a total claim of $2.4 billion.

Original Agreement Allows for Recovery of 70% of Assets

According to a report by CoinDesk, in court documents filed on Tuesday, DCG has reached a preliminary agreement with Genesis creditors to address claims made in the Genesis bankruptcy. The plan could result in unsecured creditors recovering 70%-90% in USD equivalent and 65%-90% in kind based on the face value of digital assets. All estimated recovery rates are subject to market pricing and final documentation.

The repayment agreement reached by both parties is as follows:

• $630 million unsecured loan due in May 2023: $328.8 million to be repaid with the remaining $275 million to be paid in four installments after the partial repayment agreement date.
• $1.1 billion unsecured note due in 2032: $830 million to be repaid.

Opposition from Some Genesis Creditors

However, some Genesis creditors do not seem to agree with this, as reported by CoinDesk. Some creditors argue that the proposed repayment is "wholly insufficient."

In documents filed with the court, they state:

DCG's contribution to satisfy creditor claims falls woefully short of satisfying the undisputed amounts due under the loans coming due, let alone the claims against DCG and its officers and managers, including Barry Silbert.

Additionally, creditors oppose the immunity granted to DCG and CEO Silbert from future legal claims and threaten to block the bankruptcy agreements. The document alleges that Genesis and the committee representing creditors have disregarded their fiduciary duties.

The members of these lenders have not been disclosed, but the document states that their total claims against DCG amount to $2.4 billion.

It seems that the resolution of the Genesis bankruptcy case may not be as straightforward as initially thought.