Details of the Mt.Gox civil rehabilitation plan and creditor payout terms have surfaced online. Trustee Nobuaki Kobayashi filed it with the Tokyo District Court in mid-December and, at the time of writing, it had not yet been approved.
The document contemplates payments in fiat, Bitcoin, and Bitcoin Cash. The rest of Mt.Gox’s cryptocurrencies will be sold.
Fiat payouts take priority — with the court’s permission, part or all of the Bitcoins and Bitcoin Cash may be sold to cover them.
The first payouts will go to creditors who would have received them had the bankruptcy proceeding continued. The trustee will also make baseline payments of 200 000 yen (~$1920) to each creditor.
Meanwhile, fiat-denominated claims in foreign currencies will be calculated at the exchange rate to the yen prevailing on the day immediately prior to the start of the civil rehabilitation procedure.
- 111.43 yen per 1 US dollar.
For creditors whose claims are not covered by the baseline payments, the trustee proposed two options:
- Early payout along with the baseline payment (21% of the total balance);
- Final payout (and interim settlements).
The second option is the default. Choosing the first means waiving claims to the entire balance.
The final payout will be calculated using the formula: creditor balance after the baseline payment * (value of the debtor’s assets / the sum of the balances of all creditors after the baseline payments). The document states that early payouts will not be deducted when calculating the debtor’s asset value.
Mt.Gox civil rehabilitation plan.
As the basis for cryptocurrency payouts, Kobayashi proposed the exchange rate of Bitcoin and Bitcoin Cash to the yen at the start of the proceedings.
- 749,318.83 yen per 1 BTC (~$7,205);
- 97,481 yen per 1 BCH (~$940).
Creditors must choose either fiat payouts or cryptocurrency payouts in the period between plan approval and receipt of baseline payouts. The document prohibits changing the choice and designates fiat payments as the default option.
If the debtor Mt.Gox does not have enough Bitcoins and Bitcoin Cash to cover cryptocurrency payouts, creditors who requested crypto will receive fiat.
As reported, the civil rehabilitation process began in June 2018. Mt.Gox’s bitcoin reserves are estimated at 137,891 BTC at the time of writing.
A major obstacle to approving the payout plan has been CoinLab’s claim for 1.7 trillion yen under the 2012 contract. Under that agreement CoinLab acted as intermediary between Mt.Gox and US users; however, in 2013 the exchange said the company had misinterpreted its authority. CoinLab argues that due to the breach they lost out in competing with Coinbase.
According to the trustee, CoinLab agreed to a payout of up to $11 million from MGIF LP, a Fortress Investment Group unit that acquired the rights of many Mt.Gox users to compensation under civil rehabilitation, in exchange for recognition of its disputed claims within the proceedings if later approved by the court, as junior to the claims of other creditors until the time of early payouts. The Tokyo District Court has so far approved CoinLab’s claim of ¥1.063 billion ($10.2 million), but the company disagrees with the decision.
Read more about Mt.Gox’s history and collapse in our expanded piece.
Mt.Gox Civil Rehabilitation Plan by ForkLog on Scribd
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