Mt.Gox’s Liquidation Likely After Tokyo Court Rejects Rehab Plea

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Mt.Gox’s Liquidation Likely After Tokyo Court Rejects Rehab Plea

Mt.Gox, the one-time global leader in bitcoin trade, is facing liquidation after a Tokyo court rejected its attempt to revive its business, according to a Wednesday statement by the court-appointed administrator.

CEO Mark Karpeles is also likely to be probed for liability in the failure of the Tokyo-based Bitcoin exchange, lawyer Nobuaki Kobayashi, the provisional administrator, said in a statement appearing on the Mt.Gox website.

“The Tokyo District Court recognized that it would be difficult for the company to carry out the civil rehabilitation proceedings and dismissed the application for the commencement of the civil rehabilitation proceedings,” a section of the statement published on Reuters reads.

The virtual currency exchange applied for bankruptcy protection from creditors in Japan in February, claiming that some 850,000 bitcoins worth about $454 million as per current rates had been stolen after hackers had accessed its computer software. The firm later claimed to have recovered some 200,000 of the lost bitcoins.

In today’s order for provisional administration, the court subjected the firm’s assets to Kobayashi’s control until the official commencement of bankruptcy proceedings and a bankruptcy trustee is appointed.

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Kobayashi’s statement added that once bankruptcy proceedings kick off, the liability of the company’s representative director will also be looked into as a component of the bankruptcy proceedings.

According to Fox, creditors recover less of their investments when a firm is liquidated. However, a person close to Mt.Gox claimed that there was hope a buyer for the firm would step forward, in which case creditors could receive part of any of the firm’s future earnings.

While Kobayashi did not cite an offer made in March by a group of investors to take over the collapsed outfit, he said such offers would be considered.

Last month, Brock Pierce, a former child actor who later became a successful businessperson, offered to take over Mt.Gox.

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To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com