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Mt. Gox files for Chapter 15 insolvency in US

updated 01:23 pm EDT, Mon March 10, 2014

Filing intended to stave off at least two lawsuits in US

As expected, following its Japanese bankruptcy disclosure, troubled Bitcoin exchange Mt. Gox has filed for Chapter 15 bankruptcy in the US. The filing will temporarily halt US-based lawsuits. The filing will allow potential investors to look at the exchange without legal ramifications, as well as give the exchange time to resolve some of the problems that cropped up over the weekend.

Under Chapter 15, a representative of a corporate bankruptcy proceeding outside the US can obtain access to the United States courts. It allows cooperation between the United States courts and the foreign courts, as well as other authorities of foreign countries involved in cross-border insolvency cases. The filing allows US courts to issue subpoenas, orders to turn over assets, the issuance of stays on pending actions, and orders of other types as circumstances dictate.

Mt. Gox filed for the proceedings in Dallas, Texas. The same law firm representing it in Japan, Baker & McKenzie, is handling the matter with the US court. The filing notes that it is seeking relief from US-based Bitcoin proponent CoinLab. Additionally, class-action suit plaintiff Gregory Greene has been named in the filing. Greene claims that Mt. Gox's actions and subsequent closure caused him the loss of $25,000 in Bitcoin. CoinLab is seeking $75 million, and Greene's suit is seeking recompense of lost Bitcoin as well as transaction fees kept by Mt. Gox for US users.




by MacNN Staff

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