Just one month after asking for $4 billion from the similarly bankrupt cryptocurrency lender Genesis, the bankrupt cryptocurrency exchange FTX is now disputing the assertion that it is not entitled to anything.The FTX debtors have objected to Genesis’ estimate that they are entitled to claims totaling “$0.00,” as Genesis stated in an estimating procedures motion filed on June 1 in the United States Bankruptcy Court for the Southern District of New York.
The FTX debtors claimed they were excluded from the mediation process and did not get “any advance notice” prior to the motion being filed.Even FTX debtors disputed a Genesis claim that they were kept informed of the proceedings:Despite the Genesis Debtors’ claim in the Estimation Procedures Motion that they are “working expeditiously with all parties in interest to formulate a plan structure,” the FTX Debtors have not been invited to take part in the mediation.It was stated once more that the Genesis debtors considered the nil claim estimation to be “critical” in order to avoid any delays and swiftly proceed with the “confirmation of a Chapter 11 plan.”
Additionally, it was asserted in the filing that the FTX debtors “are by far the largest unsecured creditors in the Genesis Debtors’ Chapter 11 cases” and that it is essential that they take part in the mediation:“Without the participation of the FTX Debtors, the mediation is a waste of estate resources and should not proceed.”As recently as May 3, attorneys for FTX were requesting over $4 billion from Genesis in order to recover “avoidable transfers” that took place within 90 days prior to a corporation filing for bankruptcy, as allowed by bankruptcy statutes.
The automatic suspension of legal procedures against Genesis that occurs when a company files for bankruptcy has been requested to be lifted by FTX debtors in a plea for relief from the stay.The court is scheduled to hear the motion on June 15.
This comes after Genesis’ parent firm, the Digital Currency Group (DCG), stated that it had no way to resolve its “outstanding intercompany obligations” that would help repay creditors.Due to demands from creditors, DCG and Genesis were involved in a mediation process during this time.Genesis creditors were expected to gain an 80% recovery of their money after the company filed for Chapter 11 bankruptcy, according to a settlement plan the firm presented in February.