Proposed Mt.Gox plan slapped with objection by CoinLab

Home » Proposed Mt.Gox plan slapped with objection by CoinLab

mtgox-newLong before Mt.Gox revealed that lost hundreds of millions of dollars in customer funds due to bad coding, security issues and negligence, the Tokyo-based exchange was involved in another high-profile case with Seattle-based virtual-currency startup CoinLab. With a proposed plan to settle most of Mt.Gox’s bankruptcy debits working its way through the international legal system, CoinLab’s still-unresolved lawsuit may bring the rehabilitation to a screeching halt.

In a complaint filed in US District Court in Washington state last week, CoinLab claims that Mt.Gox operated in the U.S. in violation of at 2012 partnership agreement between the two companies. Mt.Gox never actually fulfilled its part of the agreement, leaving it unable to provide promised services to U.S. clients. The resulting $75 million lawsuit and the $5.5 million countersuit by Mt.Gox have never been resolved.

With Sunlot Holdings now seeking to acquire the assets of Mt.Gox and settle most of the claims for small cash payments and shares of a newly formed company, CoinLab’s substantial lawsuit may end up dead in the water. In its filing (covered in depth on CoinDesk), CoinLab notes:

In an attempt to obtain approval of the Sunlot Proposal, Sunlot has crafted a procedural maneuver that attempts to cram down the proposal upon creditors, while avoiding competitive bidding or other meaningful creditor safeguards.”

CoinLab’s filing took aim at Sunlot’s “procedural evasion” of claims by outstanding creditors, and hinted that it might file a competing bankruptcy plan for Mt.Gox should the issues continue to be unresolved.

According to CoinDesk, Mt.Gox bankruptcy trustee Nobuaki Kobayashi responded to the developments by claiming that CoinLab’s filing was “premature,” and that U.S. filings are merely “adjunct” to the actual bankruptcy proceeding in Tokyo. Kobayashi also said that the Japanese court is not currently considering any revival proposals for Mt.Gox.

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