Tokyo District Court Commences MtGox Bankruptcy Proceedings, Appoints Trustee

MtGox has today issued a document on its website from attorney Nobuaki Kobayashi. It states the Tokyo District Court's order to commence Bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term proceedings, his appointment as bankruptcy trustee and an appendix of FAQ's for interested parties.

The document takes interested parties and creditors through what is planned in the proceedings and the rules of engagement. It is stressed that at this point there are still unanswered questions for which interested parties will have to exercise patience.

There will be a creditors meeting held on July 23, details of which will be provided later on.

Other interesting tidbits: The previous director of the company (unnamed in the document but a referring to Mark Karpeles) has "lost his authority to administer the Company’s assets pursuant to the order of commencement of the bankruptcy proceedings." Creditors must supply their information and claim amount in order to take part in a liquidating distribution. The trustee will also be investigating the reported losses and has consulted with the police.

Towards the end of the FAQ's, it gets really basic. One Q reads: "Please return the bitcoins and cash that I deposited with the Company", for which reference is made to "liquidation distribution" held under the proceedings. Reference is also made to the ability for users to check their balances on the website, the best confirmation to date that the feature is authentic.

The proceedings are progressing quite differently than those in the U.S., where investors have attempted to avoid the liquidation route, which will inevitably return at most a fraction of their holdings, and instead pushed for a revival of the exchange's operations (under new management). This would theoretically generate some revenue to eventually recoup losses.

They have also hit a roadblock in that former CEO Mark Karpeles has refused to appear in person, which was a requirement of the judge presiding over the case. One lawyer has speculated that Karpeles can be arrested should he set foot in the country.