diff --git a/api/service/generation_service.py b/api/service/generation_service.py
index 70711ae..818cf29 100644
--- a/api/service/generation_service.py
+++ b/api/service/generation_service.py
@@ -154,9 +154,16 @@ class GenerationService:
                 gemini=self.gemini
             )
             self._update_generation_metrics(generation, metrics)
-        except Exception as e:
-            await self._handle_generation_failure(generation, e)
-            raise
+
+            # 3. Process results
+            created_assets = await self._process_generated_images(generation, generated_bytes_list)
+
+            # 4. Finalize generation record
+            await self._finalize_generation(generation, created_assets, generation_prompt, start_time)
+
+            # 5. Notify
+            if generation.telegram_id and self.bot:
+                await self._notify_telegram(generation, created_assets)
         finally:
             if not progress_task.done():
                 progress_task.cancel()
@@ -165,16 +172,6 @@ class GenerationService:
                 except asyncio.CancelledError:
                     pass
 
-        # 3. Process results
-        created_assets = await self._process_generated_images(generation, generated_bytes_list)
-
-        # 4. Finalize generation record
-        await self._finalize_generation(generation, created_assets, generation_prompt, start_time)
-
-        # 5. Notify
-        if generation.telegram_id and self.bot:
-            await self._notify_telegram(generation, created_assets)
-
     async def import_external_generation(self, external_gen) -> Generation:
         external_gen.validate_image_source()
         logger.info(f"Importing external generation for user: {external_gen.created_by}")
@@ -281,8 +278,8 @@ class GenerationService:
         try:
             async with generation_semaphore:
                 await self.create_generation(gen)
-        except Exception:
-            await self._handle_generation_failure(gen, None)
+        except Exception as e:
+            await self._handle_generation_failure(gen, e)
             logger.exception(f"Background generation task failed for ID: {gen.id}")
 
     async def _prepare_generation_input(self, generation: Generation) -> Tuple[List[bytes], str]:
@@ -341,7 +338,12 @@ class GenerationService:
     async def _handle_generation_failure(self, generation: Generation, error: Optional[Exception]):
         logger.error(f"Generation {generation.id} failed: {error}")
         generation.status = GenerationStatus.FAILED
-        generation.failed_reason = str(error) if error else "Unknown error"
+        # Don't overwrite if reason is already set, unless a new error is provided
+        if error:
+            generation.failed_reason = str(error)
+        elif not generation.failed_reason:
+            generation.failed_reason = "Unknown error"
+        
         generation.updated_at = datetime.now(UTC)
         await self.dao.generations.update_generation(generation)