Just a month after bankrupt cryptocurrency exchange FTX sought $4 billion from cryptocurrency lender Genesis, also bankrupt, it is now contesting a claim that it is not entitled to anything.
According to a court on June 2 presentation In New York Bankruptcy Court, FTX debtors have filed an objection to Genesis's estimate that they are entitled to claims totaling '$0.00', which Genesis stated in an estimate proceedings motion filed on June.
The FTX debtors claimed that they did not participate in the mediation process and received "no advance notice" before the motion was filed.
In fact, the FTX debtors even rebutted a statement made by Genesis that suggested that the FTX debtors were informed throughout the process:
The FTX Debtors have not been invited to participate in the mediation despite the Genesis Debtors' representation in the Estimating Procedures Motion that they are "working expeditiously with all interested parties to formulate a plan structure."
It was reiterated that the zero claim estimate, as outlined in the motion, was considered "critical" by Genesis debtors to avoid delays and move quickly with "confirmation of a Chapter 11 plan."
It was argued that the FTX debtors "are by far the largest unsecured creditors in Genesis debtors' Chapter 11 cases" and that it is crucial that they participate in mediation, noting:
"Mediation is a waste of equity resources without the inclusion of FTX debtors and should not continue without the participation of FTX debtors."
It was not until May 3 that the FTX lawyers were looking for nearly $4 billion Genesis, under bankruptcy laws that allow you to recover "avoidable transfers" that occur in the 90-day period before a business files for bankruptcy.
FTX's debtors have filed a Motion Seeking Stay Relief, which is a request for the court to lift the automatic stay of legal proceedings against Genesis, a standard procedure when a company files for bankruptcy.
It was requested that the motion be set to be heard by the court on June 15.
Related: SBF wants to subpoena documents from the former FTX/Alameda law firm to use in its defense
This comes after Digital Currency Group (DCG), the parent company of crypto startup Genesis Capital, reported on May 9 that it had there is no solution to your โoutstanding intercompany obligationsโ that could help repay creditors.
During this period, DCG participated in a mediation period with Genesis in response to the creditors' claims.
In February, the firm had filed a liquidation plan, anticipating Genesis creditors would receive an 80% recovery of the funds after the company filed for Chapter 11 bankruptcy.
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