In an announcement by the Civil Rehabilitation trustee appointed in the bankruptcy proceedings of MT. Gox, it appears that the aforementioned proceedings have been ordered to stop by the Tokyo district court in order to commence Civil Rehabilitation.
The commencement of these proceedings follows a petition by some of the creditors affected by the MT.gox debacle, The announcement reads:
“The petition was heard, and at 5:00 p.m. on June 22, 2018, the Tokyo District Court issued an order of the commencement of civil rehabilitation proceedings for MTGOX. As a result, the previously ongoing bankruptcy proceedings were stayed. In addition, simultaneously with the order of the commencement of civil rehabilitation proceedings, an administration order was issued by the Tokyo District Court, and I have been appointed Civil Rehabilitation Trustee”.
The trustee, Nobuaki Kobayashi, an Attorney-At-Law elaborated on what the civil rehabilitation proceedings would involve. He states that “the power and authority to administer and dispose of MTGOX’s assets” is still solely his hands. Continuing to say that he will implement proceedings and the administration of MT.Gox’s assets as well as the investigation of claims as per a court order.
This is big news:— Alistair Milne (@alistairmilne) June 22, 2018
Mt.Gox to end bankruptcy proceedings and start Civil Rehabilitation (i.e. distribution of remaining Bitcoin to creditors pro-rata)https://t.co/cGIwaopo1H
MtGox initially filed bankruptcy under japans Civil rehabilitation code to seek protection from creditors. The firm stated on its website that it hoped to cotinine operations “in order to increase repayments to our creditors.”.
Civil rehabilitation is a bankruptcy law in japan, which allows a company – in this case, Mt. Gox - to force a lender to alter the terms and conditions of a loan in order to alleviate bad debt.
This is big news for creditors of MT. Gox. The petition to start Civil Rehabilitation was filed with the courts back in November last year and fell, mostly, to the side-line while the court examined the petition. The enactment of Rehabilitation proceedings was a longshot; the courts have the right to deny the application in cases of fraud or if creditors disapproved of a restructuring of a company. It appears however that the court saw fit to proceed.
The timeline of proceedings ends in February next year with the deadline for the proposed rehabilitation plan. The deadline for rehabilitation claims is October 22nd, 2018 which will then be examined on January 24, 2019.
In a Q&A section, Kobayashi clears up the distinctions between bankruptcy and rehabilitation proceedings, stating that the main difference is that assets typically fall back in the hands of the debtor. however, as previously mentioned, the trustee - aka Kobayashi - still retains the power to administer the MT.Gox assets due to an “admisterative order” place by the courts:
“in this civil rehabilitation proceedings, the Tokyo District Court has issued an administrative order and has appointed me as Civil Rehabilitation Trustee. Therefore, the power and authority to administer and dispose the Civil Rehabilitation Debtor’s assets is exclusively vested in me”.
The trustee goes on to say that the “Bitcoin claims” will be returned as Bitcoin and not the monetary equivalent; adding that the returns will be based on the valuation of bitcoin at the time.
The announcement continues to state that a creditors meeting will take place on September 26th, 2018 at Tokyo district court to discuss the status of the debtors (MT.Gox) assets.
It also appears that claimants may be able to gain BCH from the Bitcoin cash fork, stating that further information will be available later.
No more Mt Gox dumps?! https://t.co/Ggih5g5qYA— Crypto_Ed_NL (@Crypto_Ed_NL) June 22, 2018
The announcement turns to the hotly debated topic of how the Bitcoins were handled during the bankruptcy proceedings. Kobayashi states that the assets were sold “in a manner that had no effect on market price, and not by ordinary sale on an exchange” adding that “nothing had been determined regarding the [future] sale of Bitcoin”.
The announcement concludes by confirming that MT. Gox has no plan to resume operations at this time.