Thread by @ramahluwalia

1/ Genesis Plan:

To Vote Yes, or Not, That is the Question

Here's my take on the Genesis Bankrtuptcy plan...

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2/ Disclosure: I am not a lawyer, and I am not your advisor.

I am not a party to the dispute and have no commercial or customer relationship with Genesis, Gemini, or DCG.

You should retain legal counsel and an advisor to work thru this complex plan.

3/ There are a lot of brass knuckle threats at work here in this negative sum negotiation game.

Example: Genesis is saying they will waive 'preference claims' - meaning anyone that withdrew within 90 days of bankrtupcy will not be clawed back if they vote Yes.

4/ Be aware that none of the voting committees or the Ad Hoc Group have a fiduciary obligation to you.

Neither does Gemini. Gemini is an Agent of Earn.

All parties are acting in their own interests. Gemini is an Agent not a Fiduciary.

5/ It's absurd that Death Traps are permitted in the bankruptcy code for retail investors.

It's like saying if you don't vote for the next President you're not entitled to certain rights if you lose.

6/ Here are the creditor classes. The plan assumes under a 'drive truck thru it' set of assumptions different recoveries.

7/ Here's another table showing expected recoveries.

However, there is no breakout for Earn explicitly.

There is the ongoing dispute of the GBTC collateral.

This puts Genesis direct creditors and Gemini Earn creditors in a conflict with one another.

8/ The Bankruptcy Court can approve the plan so long as at least one impaired class of accepts the claims.

I'd say the odds of no impaired classes accepting the plan is low - although it's hard to gauge this.

That matters b/c of the Death Trap clause.

https://x.com/ramahluwalia/status/1741098744324501686?s=20

8/ Creditors will be paid from the following sources:

Cash, digital assets
Avoidance recoveries
Proceeds from Partial Repayment Agreement, Monetization Transactions, the DCG Loans, the DCGI Loan, the *DCG Note*, DCG Tax Receivables
Causes of Action 0Parties

10/ Crucially, there are no releases against DCG or executives - so there's plenty of balance sheet to make creditors whole.

The releases are customary.

If there were releases, I would say Vote no.

9/ My view, begrudgingly, is vote Yes.

Today, the lawyers are making a fortune on this plan in one of the mostly complex litigations.

That eats the pie for creditors.

Voting Yes means preserving the pie and speedier distributions.

10/ I expect Earn will be made whole ultimately both thru this process and the action Gemini is pursuing against DCG.

And don't forget the NYAG and the SEC are on this as well.

So long as Digital Assets hold up in value, I expect Earn will be made whole.

11/ It's hard to see how Voting No produces a materially different plan.

The same actors are at the table.

DCG, which I believe is influencing Genesis, won't budge now that Grayscale is throwing off loads of cashflow.

They will entrench and litigate / fight.

12/ This is a complex bankruptcy plan with thousands of pages. I've only done a narrow and targetted read of several sections.

If you have alternative views or believe I am missing something, feel free to post below.

The vote is in 3 days.

Good luck folks.