The Chapter 15 US bankruptcy filing submitted by defunct bitcoin exchange Mt. Gox won approval in a Dallas court today as part of a move that will send proceedings to Japanese courts for further deliberation.
The case update, while largely procedural, should empower Japanese courts to take a greater oversight into the case, including any proposed restructuring plans.
Bloomberg Businessweek summed up the importance of the decision, writing:
“The ruling empowers the company’s Japanese trustee to examine witnesses, gather and review evidence and oversee assets in the US, such as servers.”
Mt. Gox KK, the exchange’s Japanese entity, first filed for Chapter 15 bankruptcy in March. The filing does not protect other exchange entities such as Mt. Gox parent company Tibanne KK and CEO Mark Karpeles.
Possible revival plan update ahead
Mt. Gox’s Japanese bankruptcy trustee Nobuaki Kobayashi has previously said that the US bankruptcy filing approval was necessary so he could exert more influence on the case and vet any revival plans.
In addition to Sunlot Holdings, Seattle-based bitcoin incubator CoinLab and Chinese exchange OKCoin have both been rumored to be seeking participation in the upcoming bidding process, though neither have confirmed such interest.
As recently as May, however, Kobayashi suggested that he is not currently considering any investor proposals – including the Sunlot Holdings bid – due to the nascent stage of the court proceedings. Additionally, it is not clear when such a review will take place.
Case enters fourth month
Though the exchange originally filed with the goal of restructuring the company, this plan was put to rest in a Tokyo court, which denied the company the ability to restructure, sending Mt. Gox to liquidation earlier this year.
At the time, Kobayashi was appointed as bankruptcy trustee, though most developments in the fast-moving case have been occurring in the US, the site of the only active revival attempt and early legal hearings.
In February, Mt Gox sought protection from Japanese courts after falling into bankruptcy, and a month later was granted preliminary protection in the US under Chapter 15 of its bankruptcy code, giving it certain protections from creditors.
Even in spite of any revival plan or stay of action against the company’s primary corporate entity, lawyers for the international class of former exchange users suggest they will pursue continuing action against CEO Karpeles and Tibanne KK.
Additional reporting contributed by Tanaya Macheel
Wooden gavel and Japanese flag via Shutterstock