Today an agreement that would resolve two class-action lawsuits for fraud brought by United States and Canadian customers was announced by Sunlot Holdings Ltd, and leading members of Mt. Gox including Founder Jed McCaleb, and former marketing chief Gonzague Gay-Bouchery, as well as a large number of Mt Gox customers that are being represented by Edelson PC. It is very important to note that this is not a completed deal, and it is just a proposal that could resolve the national charges that Mt. Gox faces at this point. If this deal doesn’t go through in Japan, the investigation of claims will not occur until 2015.
[dropcap size=small]U[/dropcap]nder the agreement, which was filed in Chicago, the Mt. Gox assets are to be immediately distributed on a proportional basis determined by an audit from an independent audit to the 127,000 + customers who lost personal assets in the crash of the exchange. These customers would also receive 16.5% interest in Sunlot Holdings Ltd which would allow them to gain the benefits of receiving company dividends. These customers would also benefit from any future buyouts or IPO investments made in the company.
The settlement would call for an Administration and Prosecution Fund which would manage the recovery of approximately $275 million worth of stolen Bitcoins and other assets. The funds would be capitalized by $10 million which is 3.6% of stolen assets in MtGox cash. The bounty would be held by Nobuaki Kobayashi, the administrator selected by the Tokyo District Court to manage the case. The fund would investigate the losses, as well as persecute perpetrators that were involved in the theft. An incentive bounty of 10% of recovered assets would be used as a reward for the parties participating in the investigation.
The negotiation process between Sunlot Ltd. and Edelson PC started in Chicago at Edelson’s headquarters. Retired Federal District Judge Wayne Andersen, of JAMS, is an independent mediator in the negotiations. The mediation of the negotiations is being done with the influence of stakeholders, representatives from multiple countries, and thousands of customers that had assets in Mt. Gox. The class-action settlement is scheduled for federal court in Chicago on May 1st for preliminary approval. The settlement will also seek approval in Canada. The plans of the settlement will need to be reviewed by the Bankruptcy court in Japan before any action can commence on the planned settlement.
If this settlement goes through it is possible that Mt. Gox could be purchased or even rebuilt by investors. Previous customers would receive some assets back and earn some dividends in Sunlot Ltd. Sunlot Ltd does not own Mt. Gox, however; they have plans to possibly purchase and rebuild the exchange. Sunlot Ltd created SaveGox.com earlier this month as a way to announce a possible plan to rebuild the exchange. Sunlot plans to augment the new exchange with additional security and features that Mt. Gox lacked.
The defendants Jed McCaleb and Gonzague Gay-Bouchery have agreed to cooperate in the recovery effort alongside Sunlot Ltd. This class-action settlement has the potential to recover more lost funds for Mt Gox customers than a liquidation plan would offer.If the company were to be liquidated, the fees paid to bankruptcy lawyers would severely cut into the potential recovery funds which would be returned to customers.
We will keep you updated as new events continue to unfold, and more information becomes available to us. This class-action settlement could resolve and pave the way for a new exchange to be reconstructed and return stolen funds to customers that have been waiting for over two months without resolve.