Digital Currency Group (DCG) announced on Friday that it has successfully paid off its short-term loans from Genesis, its bankrupt subsidiary. This recent financial move marks a substantial step forward for the firm, bringing its total debt repayment to creditors to an impressive figure exceeding $1 billion.

Source: Digital Currency Group on X

 

Substantial Debts Settled

DCG has directed almost $700 million of this billion-dollar repayment to Genesis alone. The repayment comes after Genesis filed a lawsuit against DCG in September, seeking to recover an outstanding loan balance surpassing $610 million, due since May 2023. September court documents revealed DCG’s total debt to Genesis and other creditors amounting to over $1.7 billion. Additionally, Genesis pursued a separate legal action to reclaim around 4,550 BTC, valued at approximately $199 million.

DCG’s Agreement and Future Payments

In November, a strategic agreement was reached between DCG and Genesis. Under this arrangement, DCG committed to a $200 million payment over the subsequent weeks, as Genesis’ legal representative stated. Moreover, the remaining loan balance is scheduled for repayment to Genesis by April 1, per the plan approved in federal bankruptcy court.

Maintaining Stake and Tax Benefits

Further, the firm has agreed not to alter its ownership structure until Genesis’ bankruptcy proceedings conclude. This decision ensures that DCG’s stake in Genesis remains above 80% until the lender’s Chapter 11 plan receives approval or shifts to a Chapter 7 proceeding. 

This arrangement is crucial for Genesis to stay protected under DCG’s tax consolidated group. Such protection could be instrumental in preserving the potential value of federal net operating loss carryforwards (NOLs), a tax benefit allowing Genesis to offset losses against future profits. Genesis could retain benefits on NOLs amounting to $700 million.

Moreover, DCG expressed optimism about the future, stating,

“With this milestone behind us, we’re looking forward to the next chapter of DCG and the future growth of our industry.”

The company reaffirmed its commitment to honoring financial obligations, emphasizing its dedication to responsible fiscal management and industry growth.

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The post Breaking: DCG Clears Over $1 Billion in Debt to Creditors, Including Genesis appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am