A group of creditors of the defunct bitcoin exchange Mt Gox has filed a new court petition in an effort to prevent a possible billion-dollar payout to its CEO.
As reported by the Financial Times, the creditors are seeking to move Gox out of bankruptcy and into a process of civil rehabilitation. If successful, the legal effort would shift the process of unwinding the company, which is primarily owned by CEO Mark Karpelès, and the 202,195 bitcoins held by the Gox trustee (worth approximately $3.4 billion at press time).
Mt Gox infamous collapsed in early 2014 following revelations that it had lost hundreds of millions of dollars (at then-current prices) worth of bitcoin. The exchange, once the world's largest by trading volume, ultimately declared bankruptcy and its CEO was subsequently accused of embezzlement and data manipulation.
Under current Japanese bankruptcy law, if Gox maintains its current status, it will pay its creditors the amount they had invested in U.S. dollars in 2014. However, due to the rise in bitcoin's price, this means Gox – and by extension, majority shareholder Karpelès – could receive a multi-billion dollar windfall, according to Fortune.
Creditors contend that Mt Gox's liabilities can be easily paid off with its existing bitcoins, even after returning what the creditors believe is owed to them due to its current price.
By the Financial Times' math, after returning creditors their bitcoin and paying off its liabilities, Gox would have more than 173,000 bitcoins remaining, which would be worth just under $3 billion.
The Japanese court overseeing Gox's bankruptcy is now looking into the claim but has not yet made a ruling one way or another.
"The creditors bringing the case say the outcome is likely to come down to a "battle of experts": those working for the bankruptcy trustee, who argue the current liquidation plan is more stable, and those hired by the creditors, who say their solution is quicker and fairer," the newspaper added.
Gavel image via Shutterstock