Genesis employs a restructuring specialist in its effort to avoid bankruptcy
According to reports, the financially challenged lending company has hired Moelis & Company to assist it to evaluate its alternatives.
According to reports, Genesis Global Capital has recruited a restructuring consultant to evaluate all viable possibilities, including but not limited to a potential bankruptcy.
The New York Times reported on November 22 that the business had retained the services of investment bank Moelis & Company in order to assess its alternatives. However, sources close to the matter insisted that no financial decisions had been taken and that a bankruptcy filing might still be avoided.
Moelis & Company was also one among the companies retained by Voyager Digital after it halted withdrawals and deposits on July 1 in order to investigate “strategic options.”
As part of a restructuring plan that would ultimately “return value to clients,” Voyager Digital filed for Chapter 11 bankruptcy in the Southern District Court of New York days later.
A Genesis spokeswoman just informed Cointelegraph that the company has no “imminent” intentions to file for bankruptcy, contradicting a Bloomberg article dated November 21.
Investors are being asked for $500 million to $1 billion by Genesis to make up for a deficit caused by “extraordinary market volatility” and the collapse of cryptocurrency exchange FTX.
According to a report published on November 22 by Bloomberg, the troubled lending company has $2.8 billion in outstanding loans on its balance sheet, with approximately 30% of its lending going to “related parties” such as its parent company Digital Currency Group and its affiliate and lending unit, Genesis Global Trading.
In a letter recently circulated, Digital Currency Group CEO Barry Silbert alleges that the company owes Genesis Global Capital $575 million, which is due in May 2023.
Since FTX’s collapse on November 11, all eyes have been on Genesis, Grayscale Investments, and its parent company, Digital Currency Group, out of worry that they may be the next enterprises to fall victim to the contagion.