Originally seen in
MoneyBeat - a Wall Street
One thing we can tell
you about the Mt. Gox bankruptcy case: It won't be like any other bankruptcy
case you've seen.
MoneyBeat had a very
enlightening and interesting talk with Christopher Mirick, a partner at the
international law firm Pillsbury Winthrop Shaw Pittman, operating in the
firm's Insolvency & Restructuring practice. He is also one of two educational
directors at American Bankruptcy Institute's international committee and
co-author of the book "Strategies for Creditors in Bankruptcy Proceedings."
One point he made,
that seems obvious in retrospect, is that there's never quite been a bankruptcy
case like this one. It involves a new technology, a company that seemed to
operate with only a few employees and almost no presence in the countries
across the globe where it did business, and questions of cross-border
What follows is a
paraphrased version of our conversation.
How messy is this
bankruptcy going to be?
It's going to be "very
messy," Mr. Mirick said. There are a couple of things to think about. For
one thing, Mt. Gox has creditors all over the world. Of their roughly 130,000
creditors, only about 1,000 are in Japan. According to Mt. Gox, they don't have
U.S. bank accounts. "So what's a person in Illinois going to get? There's
nothing there," Mr. Mirick said. Mt. Gox did business in a
lot of places where it didn't have any physical existence. "What's there to
Is your firm involved
in the case?
Mr. Mirick said
this kind of case would be "up our alley," but the firm isn't currently
involved, although it does have a Tokyo office. "But we would jump at the
"You've never had a
case like this." It involves a cutting-edge technology, and questions about
cross-border enforcement of bankruptcy proceedings. Mr. Mirick pointed
to Lehman Brothers, for comparison [a case that, we'd note is still being settled.] Unlike Mt. Gox, Lehman had entities
in each jurisdiction where they operated. "This [Mt. Gox] is just like a couple
of guys with some computers who happened to be in Japan, and handling half a
billion dollars that went missing."
What can a creditor
hope to recover?
Mr. Mirick said
creditors of Mt. Gox should be looking for a way to track the money and bring
it back, if possible. They should also examine the timeline, for when the money
first disappeared, he said. Was it three months ago? Six? "If they were making
payments during that time, maybe you could claw some of that back."
From the creditors'
point of view, Mr. Mirick said, somebody has to be blamed, whether it's the
Mark Karpeles, the directors, or the officers. That person or people may
have insurance, if not assets, and creditors may be able to go after that, he
"But, for a company
without physical assets, the ability to get a recovery is quite limited."
Link to story: http://blogs.wsj.com/moneybeat/2014/03/05/mt-goxs-bankruptcy-case-will-be-unlike-any-other/