MtGox rehabilitation dismissed, provisional administration ordered

By Caroline Salls

Pittsburgh, April 16 - MtGox Co., Ltd.'s civil rehabilitation proceeding has been dismissed, and the company has been placed in provisional administration, according to a news release.

The company said an investigation related to the disappearance of bitcoins and missing funds has been ongoing since the rehabilitation proceeding was filed in late February. MtGox said the investigation will take some time, and there are currently no prospects for the restart of the business.

In addition, the company said it is in negotiations with sponsor candidates, but the selection process has not yet begun.

Taking these factors into account, as well as the fact that the drafting of a rehabilitation plan and its adoption or approval appear difficult, the Tokyo District Court decided to dismiss the application for civil rehabilitation and issue an order for provisional administration.

Nobuaki Kobayashi, who was the supervisor and examiner under the rehabilitation proceeding, was appointed provisional administrator.

Negotiations with sponsor candidates will be handed over to the provisional administrator to maximize the distribution to all creditors following a transfer of the business to a sponsor, the company said.

The administrator said Chapter 15 bankruptcy proceedings will be used as part of the asset administration, and the filing of bankruptcy proceedings are expected to be ordered by the Tokyo court.

According to a separate release, the court also issued an order for prohibition of payments and asset dispositions and an order for comprehensive prohibition.

Under these orders, the provisional administrator will administer MtGox's assets under the supervision of the Tokyo District Court.

Specifically, the administrator said the order for the prohibition of making payments, establishing security over assets and disposing of assets prohibits or restricts, until the order for the start of bankruptcy proceedings is made, the making of a payment or the establishing of any securities for specified debts without court approval, as well as the disposition of assets.

Meanwhile, the order for comprehensive prohibition prohibits "compulsory execution" and the launch of a procedure for the collection of national tax in arrears against the company's assets until the order for bankruptcy proceedings is made.

MtGox is a Tokyo-based online bitcoin exchange operator. The company filed Chapter 15 bankruptcy on March 9 under case number 14-31229.

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