Mt. Gox: CoinLab’s $16 billion claim seems to be a strategic approach to block civil rehabilitation proceedings
Andy Pag, the Founder and Administrator of Mt. Gox Legal, was recently in the headlines for calling it quits on the on-going civil rehabilitation proceedings, owing to the claims made by CoinLab. Pag explained the reasons behind this decision, in an interview with WhatBitcoinDid’s Peter McCormack.
The discussion began with Andy Pag speaking about his trip to Tokyo for the creditors meeting, usually held every six months. He stated that there were a couple of “big things” that happened while he was in Japan, during the public meeting held by the Mt. Gox Trustee, Nobuaki Kobayashi. The Trustee announced that the civil rehabilitation proceedings would be put on hold until the CoinLab case was settled.
This was followed by Pag giving a brief background on the case. He stated that Mt. Gox was first under bankruptcy, which would have resulted in the shareholders gaining control of the firm’s assets. This, in turn, led to the creditors demanding a change of proceedings from bankruptcy to civil rehabilitation, which was later approved by the Tokyo District Court.
He stated that the initial timeline was such that the vote on the civil rehabilitation plan would have been held in April. He continued,
“[…] there is uncertainty in that process, we don’t know when it’s going to end, we don’t know how much the whole process is going to be worth for creditors with any certainty and so it was a frustration to find out that that wasn’t going to happen in April. But, what was more concerning is the reason for that is that there is this case brought by CoinLab”
Pag further stated that CoinLab had an agreement with Mt. Gox back in 2013, which was essentially to be the franchise for Mt. Gox in the United States. However, this agreement fell apart, and led to a lawsuit between CoinLab and Mt. Gox, before the collapse of the infamous Bitcoin exchange. He said,
“That lawsuit has mutated into a claim in the bankruptcy process. So back in 2014, CoinLab put in a 75 million dollar claim against Mt Gox. So, along with all the people that lost money on the exchange they were also saying to the Trustee, ‘you need to give us 75 million because that’s what this contract was worth’.”
The former administrator further stated that the case of whether CoinLab was entitled to the $75 million wasn’t settled during the bankruptcy proceedings. When the case became a civil rehabilitation one, everyone had to resubmit their claims, including CoinLab, he said. He continued,
“Between 2014 and and last year their claims had somehow grown from 75 million to 16 billion dollars. So, they are claiming $16 billion. there’s in my eyes no earthly reason how you can calculate the damages of this and come up with a number $16 billion […] it doesn’t make sense.”
Pag went on to state that according to him and a lot of creditors, this $16 billion claim looked “very much” like a “strategic approach” through which CoinLab was trying to block the civil rehabilitation proceedings. They’ve “unfortunately” been successful at it, he concluded.