Barely a month after bankrupt cryptocurrency exchange FTX requested $4 billion from fellow-bankrupt cryptocurrency lender Genesis, it is now contesting a claim that it is not entitled to anything.
According to In a June 2 court filing in the United States Bankruptcy Court for the Southern District of New York, FTX debtors have objected to Genesis’ estimate that they are entitled to claims totaling “$0.00.” , which Genesis declared in an estimate procedures motion filed on June 1.
The FTX debtors claimed that they did not participate in the mediation process and received “no prior notice” before the motion was filed.
The FTX debtors even disputed a statement by Genesis that suggested they had been kept informed throughout the proceedings:
“The FTX debtors have not been invited to participate in the mediation despite the fact that the Genesis debtors stated in the estimation procedures motion that they are “working quickly with all interested parties to formulate a plan structure.”
It was reiterated that the estimate of the null claim, as stated in the motion, was considered “critical” by the Genesis debtors to avoid any delay and move quickly with the “confirmation of a Chapter 11 plan.”
The filing also argued that the FTX debtors “are by far the largest unsecured creditors in the Genesis debtors’ Chapter 11 cases” and that it is crucial that they participate in mediation:
“Mediation is a waste of estate resources without the inclusion of the FTX debtors and should not proceed without the participation of the FTX debtors.”
As late as May 3, FTX lawyers were asking Genesis for nearly $4 billion, under bankruptcy laws that allow recovery of “avoidable transfers” that occur in a 90-day period before a company files for bankruptcy. bankruptcy.
FTX’s debtors have filed a motion seeking to lift the stay – a petition for the court to lift the automatic stay of legal proceedings against Genesis – which is standard procedure when a company files for bankruptcy.
The court is scheduled to hear the petition on June 15.
This comes after Genesis’s parent company, Digital Currency Group (DCG), said it had no solution for its “outstanding intercompany obligations” that could help repay creditors.
During this period, DCG was immersed in a mediation period with Genesis in response to the claims filed by creditors.
In February, the company had filed a settlement plan, anticipating Genesis creditors would receive an 80% recovery of the funds after the company filed for Chapter 11 bankruptcy.
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