DISCLAIMER: Our lawyer has reported back asking for more time (about 2 more weeks) to investigate options further. As such he hasn’t presented a formal legal opinion to us yet. I’m very happy to be able to share this information, (a large majority of the creditors in the group that paid for this advice, who voted wanted this to be shared) but I stress IT IS NOT COMPLETE, NOT FINAL AND SO SUBJECT TO CHANGE.
The information shared here are for general information purposes only to permit you to learn about MtGox Bankruptcy. The information presented is not legal advice, is not to be acted on as such, may not be current and is subject to change without notice. Communication on this website does not create or constitute an attorney-client relationship.
This was the informal correspondence from our Lawyer.
Dear Mr. Andy Pag,
The key problem in this case is a Japanese statute, Article 103 of the Bankruptcy Act, which provides that valuation of claims needs to be as of the time of the commencement of the bankruptcy proceeding. In our view, it is very difficult to overcome the statute under the current bankruptcy proceedings because the statutes are controlling under the Japanese law system.
We think that we need to use another proceeding to overcome the statute, which is set for bankruptcy proceedings. We are currently considering a transfer of the bankruptcy proceeding to a civil rehabilitation proceeding. It is not usual, but in our current view, it seems attractive. We face various legal issues in this regard, and needs more time for our analysis. We will update you with more detail in two weeks. We would appreciate your understanding that steady steps are needed to overcome the challenging problem in this case.
I also made some notes on the phone with him, which I’m not comfortable sharing publicly at this time, as they raise more questions than they answers, and I don’t want to risk spreading confusion.
My feeling is that if the Bankruptcy Act is too prescriptive to allow either the trustee, or a legal petition to the court, to challenge the surplus going to shareholders, but that moving to CR will allow a fairer distribution, then it is something we should start exploring. I intend to do that in the next 2 weeks in anticipation of further developments from the lawyer, fully aware however that the lawyer’s research may take further turns.
The lawyer mentioned the need for a “sponsor” – a legal entity which can be trusted to oversee the process of distribution. For instance a BTC exchange, he intimated. I’ve asked for more clarity on this, but it may not come for a couple of weeks.
From my perspective as a non-legal expert I believe this approach gives the opportunity for some advantages:
- All assets go to creditors, none to shareholders.
- Legal fees and management fees would be minimal, and not taken upfront. They can be paid at the end of the process from the sponsor, and are effectively shared equally among all creditors, and therefore negligible on individual claims.
- We, (ALL creditors), have the opportunity to design a distribution method between fiat and btc claims that we can all agree on in advance, rather than be at the whim of a legal statute’s byproduct. There’s no reason why anyone should lose out compared to the current plan.
- A legal entity would then continue to exist longer-term to pursue the stolen coins – backed by ~24,000 newly wealthy creditors.