FTX and Genesis have reportedly reached an agreement in principle to settle their ongoing legal dispute. Both bankrupt firms had previously claimed that the other party owed them money. However, their legal counsel recently wrote to bankruptcy Judge Sean Lane, stating that they had come to a settlement. The exact details of the settlement have not been disclosed.
The agreement in principle was filed by their representatives at the United States Bankruptcy Court for the Southern District of New York. It stated that the settlement would resolve the claims made by the FTX Debtors against the Debtors in the Chapter 11 Cases, as well as the claims made by the Genesis Debtors against the FTX Debtors in the FTX Chapter 11 Cases.
FTX had filed for Chapter 11 bankruptcy last November, followed by Genesis three months later. FTX sought to recover funds received by the lending firm and non-debtor affiliates in order to repay its extensive list of creditors. Genesis, on the other hand, was the largest unsecured creditor of FTX and its affiliated companies, with a debt of over $226 million.
FTX had initially claimed that DCG’s lending arm owed them approximately $4 billion, but later revised the figure to $2 billion. Genesis, however, disputed this claim and filed its own motion stating that FTX was entitled to nothing.
The settlement between FTX and Genesis is a significant development in their legal battle. While the exact terms of the agreement remain undisclosed, it represents a step towards resolving the claims and potentially bringing an end to the bankruptcy proceedings.
This news highlights the challenges faced by companies in the crypto industry, as bankruptcies and legal disputes continue to be a concern. The outcome of this settlement will be closely watched by industry participants and investors, as it may have implications for future cases involving bankrupt crypto firms.
Disclaimer: This article is for informational purposes only and should not be construed as financial or legal advice.