{"id":20317,"date":"2019-04-10T14:39:10","date_gmt":"2019-04-10T14:39:10","guid":{"rendered":"http:\/\/ci027cfe6c00062697"},"modified":"2019-04-10T14:39:10","modified_gmt":"2019-04-10T14:39:10","slug":"quadrigacx-starts-bankruptcy-proceedings","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/culture\/quadrigacx-starts-bankruptcy-proceedings","title":{"rendered":"QuadrigaCX Starts Bankruptcy Proceedings"},"content":{"rendered":"
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It\u2019s been a long and winding road with many twists and turns for the beleaguered cryptocurrency exchange QuadrigaCX<\/a> and its 115,000 former users who are owed roughly $190 million.<\/p>\n

On April 8, 2019, the case reached a critical fork in the road as a court, recognizing that attempts to restructure the exchange have failed, appointed business services firm Ernst & Young<\/a> as the exchange\u2019s Trustee in Bankruptcy to watch over bankruptcy proceedings. It will also assume control of all of QuadrigaCX\u2019s assets.<\/p>\n

Ernst & Young Takes Control<\/strong><\/h3>\n

With QuadrigaCX moving into bankruptcy, it appears that Ernst & Young now becomes the dominant player in this ongoing drama as previously appointed Chief Restructuring Officer Grant Thornton will no longer be involved.<\/p>\n

\u201cEY will continue its investigation, but once it is the trustee, it will have greater powers to do so,\u201d attorney Evan Thomas of Osler, Hoskin & Harcourt<\/a> told Bitcoin Magazine<\/em>. \u201cThis includes the power to examine people who have relevant information under oath.\u201d<\/p>\n

Critically, Ernst & Young will also have the ability to seize the exchange\u2019s assets.<\/p>\n

\u201cThe trustee can also sell QuadrigaCX’s assets and start lawsuits to recover property or damages,\u201d Thomas said. \u201cThe trustee will collect whatever it can recover for eventual distribution to creditors.\u201d<\/p>\n

The next step is a meeting of creditors who will elect a Board of Inspectors to oversee the work of Ernst & Young and grant permission to take actions such as selling its remaining assets.<\/p>\n

It is likely, noted Thomas, that some of the same users elected to the Users Committee \u2014 a group of seven former QuadrigaCX customers who have been representing<\/a> the 115,000 left stranded by the exchange \u2014 will be elected as these inspectors.<\/p>\n

Jennifer Robertson\u2019s Assets Are Frozen<\/strong><\/h3>\n

Ernst & Young asked<\/a> the court for and was granted an \u201casset preservation\u201d order, meaning that all assets held by Jennifer Robertson, the wife of late CEO Gerald Cotten, and the Cotten estate are frozen.<\/p>\n

The preservation order prohibits Robertson from selling, removing or transferring any assets. However, it allows her to cover her legal and living expenses by granting her access to two bank accounts overseen by Ernst & Young.<\/p>\n

A source close to the case said it appeared that Robertson continues to retain the law firm Stewart McKelvey to represent her and the Cotten estate, despite earlier reports that said the firm was withdrawing its counsel.<\/p>\n

What\u2019s Next?<\/strong><\/h3>\n

\u201cThere will be a claims process for creditors to file claims for consideration by the trustee,\u201d said Thomas. \u201cEventually, whatever money or other property that is recovered by the trustee will be distributed to creditors with valid claims.\u201d<\/p>\n

The Companies\u2019 Creditors Arrangement Case (CCAA) will continue temporarily while QuadrigaCX transitions to bankruptcy. Ernst & Young has said that it will be filing at least one more monitor’s report. The CCAA will eventually terminate and court proceedings will continue under Canadian bankruptcy law.<\/p>\n

For a detailed overview of the QuadrigaCX story, read \u201c<\/em>QuadrigaCX and the Million Dollar Questions: What We Do and Don\u2019t Know.\u201d<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A court has appointed Ernst & Young as the beleaguered cryptocurrency exchange’s Trustee in Bankruptcy.<\/p>\n","protected":false},"author":2916,"featured_media":20318,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[1504,3418,357,3209],"class_list":{"0":"post-20317","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-culture","8":"tag-bankruptcy","9":"tag-ey","10":"tag-exchanges","11":"tag-quadrigacx"},"author_data":{"id":2916,"name":"Jessie Willms","nicename":"jessie-willms","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/34e39b2d2b80d0f1b4eaf183ca23eff71d1e903536d749658f27936a80197dee?s=96&d=robohash&r=g"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/quadrigacx-starts-bankruptcy-proceedings.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/20317","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2916"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=20317"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/20317\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/20318"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=20317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=20317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=20317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}