The US Bankruptcy Court has finally agreed to inquire Mt. Gox in ‘In Re: Mt. Gox Co. Ltd,’ case. The hearing will be done by the US Bankruptcy Court, Northern District of Dallas where it bears the case number 14-31229.
The US Bankruptcy Judge Stacey Jernigan ordered Karpeles to appear on April 17 in Dallas at the offices of Baker & McKenzie, the law-firm that represents Mt. Gox.
Interestingly, US Bankruptcy Judge limited the deposition questioning of Karpeles to issues pertaining to whether the court should grant permanent bankruptcy protection to Mt. Gox.
Earlier in February this year, Mt. Gox filed for bankruptcy in Tokyo. Later on, Mark Karpeles asked a Dallas court to grant Mt. Gox Chapter 15 bankruptcy protection so that a class action can be avoided.
What is Chapter 15 Protection?
Under Chapter 15, protection from creditors is not automatic; he will have to prove at a May 20 hearing why he should be given this privilege. Chapter 15, Title 11, United States Code is a section of the United States bankruptcy code that deals with jurisdiction.
Here even a representative of a corporate bankruptcy (insolvency) proceeding outside the US can obtain access to the United States courts. Mark Karpeles is a classical cross-border insolvency case which may get relief from the court.
Karpeles’ Testimony is Extremely Important
The investors who lost their money when Mt. Gox collapsed are asking some tough questions that the Bitcoin exchange has not yet answered. One major question from these customers is to chief executive and majority owner, Mark Karpeles; they want him to explain why the exchange shut down in February and what happened to their 750,000 Bitcoins.
Though the company says that most of its Bitcoins have been stolen in a computer hacking attack, the customers are unable to digest the story. Particularly, when there are clear indications and information that a lot of funds were misappropriated. Customers also allege that insiders including Karpeles may have stolen the money.
From the point of view of law, Karpeles’ testimony in the case is extremely important as it could help solve the mystery of what happened to money and Bitcoins that were entrusted to Mt. Gox by its clients as he was the only person who controlled the company’s financial records and may be the only person who knows where the company’s assets and money might be.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org