In a surprising twist, Digital Currency Group (DCG), the parent company of defunct crypto lender Genesis Capital, has contested the settlement agreement reached with the New York Attorney General’s (NYAG) office, citing alleged violations of the Bankruptcy Code.
The legal saga, which saw the NYAG accusing Genesis and its collaborators of defrauding investors for over $3 billion, took an unexpected turn when DCG filed a court objection to the settlement.
Violation Of Bankruptcy Code?
DCG’s objection, outlined in a recent court filing issued on Wednesday, revolves around the belief that the proposed settlement allows the Debtors (Genesis) to redistribute value from lower classes to preferred creditors, thereby violating the absolute priority rule.
The objection argues that the New York Attorney General’s office agreement with Genesis, portrayed as a settlement, is an attempt to secure insurance against an adverse decision on the Debtors’ plan.
DCG claims that
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