The short-term loans that Digital Currency Group (DCG) had obtained from its bankrupt subsidiary Genesis have been repaid, the company said on Friday. According to this statement, DCG has paid off more than $1 billion in debt to creditors, with approximately $700 million of that amount going to Genesis alone. Genesis filed a lawsuit against its parent firm in September, claiming that it was owed nearly $610 million on a loan that was supposed to pay off in May 2023. DCG owed Genesis and other creditors more over $1.7 billion, according to court documents dated September.
In a different September lawsuit, Genesis also requested recovery of 4,550 BTC, or around $199 million as of this Friday. According to a Genesis attorney, the parent firm promised to pay $200 million over the next few weeks as part of an arrangement that the crypto lender and DCG made in November. The arrangement approved by the federal bankruptcy court stipulates that Genesis must get the remaining loan balance by April 1.
The payment follows the announcement that DCG will not transfer ownership until Genesis’ bankruptcy proceedings are over. Until the lender’s Chapter 11 plan is accepted or it is changed into a Chapter 7 case, DCG’s ownership of Genesis must continue to be greater than 80%. Genesis’s ability to deduct losses from future profits under DCG’s tax consolidated group is preserved by this verdict, which may also maintain the value of the federal net operating loss carryforwards (NOLs). Benefits on $700 million in NOLs are expected to be retained by Genesis.
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