United States Court Approves Settlement Terms Between Genesis Global and Alameda Research
A United States court has given its approval to the settlement terms agreed upon by Genesis Global, a bankrupt digital asset lender, and Alameda Research, a sister company of FTX. The court filing, dated October 11, confirms that both companies reached an agreement during the bankruptcy proceedings.
According to the settlement, Genesis Global will pay $175 million to Alameda Research. This deal has been described as „fair and equitable,“ as it is expected to save both time and money that would have been spent on litigation. However, shareholders of FTX and other companies involved in the bankruptcy case have voiced their opposition to the agreement.
The court’s decision allows the debtors to fulfill the terms of the settlement agreement as approved by Judge Sean Lane of New York. The judge also dismissed several claims by creditors, including six from Alameda Research, three from FTX trading, and an additional six from West Realm Shires Services, a representative of FTX US.
Both FTX and Genesis are currently going through bankruptcy proceedings as investors seek to recover lost assets and restructure the companies to protect some of their assets.
The recent settlement comes at a time when the former CEO of FTX, Sam Bankman-Fried, is facing an ongoing trial. Bankman-Fried has been accused of diverting investor assets.
FTX Creditors Oppose the Settlement Deal
Creditors of FTX have strongly voiced their opposition to the settlement deal due to some of its terms. They have demanded nearly $4 billion, which includes $1.6 billion in assets that were withdrawn by the crypto lender from FTX, as well as a $1.8 billion payment by FTX that was used to service loans.
In August, the agreed creditors, under the Official Committee of Unsecured Creditors of FTX, came forward to oppose the deal, calling it the „worst deal to date“ because of the significant reduction from $3.9 billion to $175 million.
According to the creditors, the funds rightfully belong to FTX shareholders and creditors. Some crypto users have also raised concerns about the nature of the agreement.
Opposition from Other Groups
Apart from FTX creditors, other groups have also distanced themselves from the settlement deal, vehemently opposing it. They view it as an attempt by FTX to obtain votes in the Genesis bankruptcy case.
Last month, Genesis creditors accused the company of attempting to manipulate the voting process and argued against accepting the settlement at face value. They claimed that the proposed settlement with FTX is a „sweetheart pre-plan deal“ and a clear „perversion of the Chapter 11 process.“
Overall, the court’s approval of the settlement terms between Genesis Global and Alameda Research marks a significant development in the bankruptcy proceedings, but it has also sparked opposition from FTX creditors and other groups who question the fairness and legitimacy of the deal.
Frequently Asked Questions
What is the settlement agreement between Genesis Global and Alameda Research?
The settlement agreement between Genesis Global and Alameda Research entails Genesis Global paying $175 million to Alameda Research. This deal is seen as mutually beneficial, as it saves time and money that would have been spent on litigation.
Who opposes the settlement deal?
FTX creditors have expressed their strong opposition to the settlement deal, demanding nearly $4 billion in total. Other groups, including Genesis creditors, have also disassociated themselves from the deal, claiming that it is an attempt to manipulate the voting process and a perversion of the Chapter 11 process.
What are the concerns raised about the settlement?
Some concerns have been raised about the settlement deal, particularly regarding the significant reduction in the amount owed to FTX creditors. Crypto users have also questioned the nature of the agreement and its impact on FTX shareholders and creditors.
How will the settlement agreement affect the bankruptcy proceedings of FTX and Genesis?
The court’s approval of the settlement terms allows the debtors to move forward with fulfilling the terms of the agreement. This development marks a significant step in the bankruptcy proceedings of FTX and Genesis, as they aim to recover lost assets and restructure to protect their remaining assets.
