Mt. Gox Bankruptcy Saga Continues: Tibanne Looks to Sell Trademarks and Judge Rejects Coinlab’s Complaints

Journalist:
Alyssa Hertig @AlyssaHertig
May 28, 2014
The spectacular Mt. Gox bankruptcy saga continues.

Wednesday Mt. Gox’s operator announced its intention to sell its rights over its bitcoin trademarks. Meanwhile, CoinLab’s string of complaints against  plan to revive Mt. Gox were shot down by a Dallas bankruptcy court judge Tuesday.

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[dropcap size=big]H[/dropcap]olding company Tibanne is looking to sell the rights to its bitcoin trademarks in Japan and the EU, where the trademarks were originally approved, for $1 million. The sale would include the word “bitcoin” and the domain bitcoins.com. Company executive Mark Karpeles told The Wall Street Journal that the company no longer has any use for them, presumably because of Mt. Gox bankruptcy.

But if sold, would any of Mt. Gox’s 127,000 creditors, collect a portion of the proceeds? That is not clear. Tibanne does not have any legal obligation to pay creditors according to lawyers familiar with the case. To think that Tibanne and Mt. Gox would continue to make money on its assets after losing hundreds of thousands of bitcoins is odd. A Mt. Gox creditor told WSJ:

Even though the company is not obligated to, it should repay customers with assets it has. That’s the way it should be. For anyone it’s obvious that Tibanne and Mt. Gox were operating as one company.

Mt. Gox purchased the trademark in 2011 to fend off “opportunists around the world” from purchasing rights to the term and to “keep the term ‘Bitcoin’ free for all.” Some lawyers doubt whether a person or entity other than Satoshi Nakamoto can trademark the term in the first place.

CoinLab’s Complaints Rejected By Bankruptcy Court

According to The Wall Street Journal, Dallas U.S. Bankruptcy Court judge rejected CoinLab Inc.’s objections to Sunlot Holdings’ plans to revive Mt. Gox at a hearing Tuesday in Dallas.

Sunlot Holdings, an investor group run by Brock Pierce, William Quigley, and Matthew Roszak, offered to buy up the dead exchange for 1 BTC. CoinLab outlined a number of complaints and hoped to stop Sunlot from acquiring the former giant Bitcoin exchange.

Yet, the Sunlot proposal has not been approved. While the court rejected the Seattle-based company’s concerns, the financial experts, led by trustee Nobuaki Kobayashi, invited alternative proposals to buy up and manage the exchange in the wake of a possible Mt. Gox bankruptcy.

CoinLab was “operations manager” before Mt. Gox’s fall, but the partnership soured when CoinLab sued the exchange for $75 million over an alleged breach of contract. The lawsuit is still unsettled.

What Should Be Done With Mt. Gox? A Proposal To Revive the Dead Exchange

Mt. Gox’s fate is unclear. About a month ago the Tokyo District Court updated the company website with a couple of documents outlining the Mt. Gox bankruptcy trustee’s authority over the bankruptcy proceedings. Creditors have until November 28 to file claims. The trustee would begin investigating claims February 25th, 2015.

But April, the investor group Sunlot Holdings offered 1 BTC for the defunct exchange and issued a plan to revive it. If Sunlot acquires the exchange, the company would apportion a 16.5% stake to Mt. Gox’s creditors. Some are wary of the proposal, but others are hopeful they could recover some money lost in the troubled exchange.

The plan obtained preliminary approval from a Northern District of Illinois court earlier this month, but still needs approval from the Japanese courts.

A Little Gossip

The investor group Sunlot Holdings is led by Brock Pierce, whose appointment to the Bitcoin Foundation board recently stirred controversy and led to a wave of resignations.  Brock Pierce has since defended himself in a letter to his fellow Directors at the Bitcoin Foundation, refusing to step down.

CoinLabs drew heat for incubating Alydian, a mining rig company that filed bankruptcy within three months.

Photo courtesy of Ben Franske / Wikimedia.

Tags: mt gox
Alyssa Hertig @AlyssaHertig

Alyssa earn a B.A. in history from the University of Minnesota. She's written for Motherboard, Reason, and PolicyMic. Get in touch on Twitter: @AlyssaHertig