CoinLab, the first venture-backed Bitcoin company founded in 2011, today announced a historic agreement with a Japanese court-appointed trustee to the Mt.Gox bankruptcy, Nobuaki Kobayashi, and MGIFLP, a Fortress company. Fortress is a leading global investment manager with approximately USD $50 billion AUM. After almost seven years, the agreement clears a path for tens of thousands of the earliest bitcoin investors to receive 90% or more of their allocated bitcoin, a digital asset that was priced at USD $489 the day Mt.Gox filed for bankruptcy.
CoinLab co-founder Peter Vessenes said: “For the last two years, CoinLab has been actively negotiating for an outcome like this: an early out for all creditors who choose it. CoinLab has closely listened to the concerns expressed by Mt.Gox creditors since the beginning. The agreement with Kobayashi-san and MGIFLP allows CoinLab to pursue its valid and legitimate claims without holding up payments for the rest of the estate, and I’m grateful for the hard work on the part of MGIFLP to help this come together. As part of the agreement, CoinLab gives up many billions of dollars of recoverable damage to ensure that creditors get their share shortly.
“Without CoinLab’s suit in play, the estate is funded at a roughly 23% payout rate for all creditor claims. If CoinLab’s suit prevails, the payout rate to other creditors would have been roughly 8%. This plan will allow all other creditors to receive a 21% payout rate now, or if they wish, to take a risk for the possibility of a full recovery when litigation is finally over by staying in,” continued Vessenes. “On behalf of CoinLab, this was an incredibly complex two-year negotiation process, balancing the needs of CoinLab investors, creditors, MGIFLP, and the trustee. I am super happy that there is now a fast path available for all other creditors.”
The agreed-upon path provides all creditors except CoinLab with an “early out” option in which:
- Small creditors (up to ¥200,000 JPY) will receive 100% of their claims;
- If any non-small creditor wants to receive early payment, they can take approximately 90% of the trustee’s estimated value of their claim and get paid out as quickly as the courts approve of the payment;
- Anyone who does not want to receive the proposed amount may stay in and wait until the litigation is over;
- In no event will these creditor decisions help CoinLab or directly pay CoinLab any more than will be owed based on a fair trial.
“Today’s historic agreement is a major step for tens of thousands of creditors that have been affected by Mt.Gox with no resolve,” said venture capital pioneer Tim Draper. “I am thrilled that people are finally getting paid by Mt.Gox. As Mt.Gox’s creditors are some of the earliest believers in cryptocurrency, I look forward to getting my bitcoin as do the tens of thousands of people that have claims. I am supportive of CoinLab’s move today to return bitcoin to their creditors, while pursuing their own claims.”
The agreement will now be up to a creditor vote. Once approved, payments will be sent to creditors who opt-in to this plan as quickly as possible.