The Tokyo District Court on Friday put on hold the ongoing bankruptcy proceedings for MtGox Co. and issued an order to start civil rehabilitation proceedings for the now defunct Tokyo-based major bitcoin exchange.
The failed operator filed for court protection under the civil rehabilitation law in February 2014 because of its ballooning debt load, mainly due to the loss of a massive amount of bitcoins. But the district court rejected the request in April that year and instead decided to begin bankruptcy proceedings.
Subsequently, the price of a bitcoin soared from about 50,000 yen to about 1 million yen. The value of bitcoins owned by MtGox was about 10 billion yen at the time of the commencement of the bankruptcy proceedings, but soared to about 200 billion yen as of last year. Meanwhile, the value of creditors' claims totaled about 46 billion yen at the time of the commencement.
In bankruptcy proceedings, assets are converted into cash and distributed to creditors based on the valuation of the creditors' claims at the time of the start of bankruptcy proceedings. But in civil rehabilitation proceedings, creditors may be paid in bitcoins.
Taking this into consideration, some of the MtGox creditors in November last year filed a petition with the district court to change the bankruptcy proceedings to civil rehabilitation proceedings.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
