Amid Court Proceedings, Widow of QuadrigaCX’s Founder Attempts to Protect Properties from Creditors
QuadrigaCX has frequently been in the news lately for their court proceedings, which has been a discussion on the ways that creditors will receive the funds that the platform has no access to.
In December, the founder of QuadrigaCX passed away as a result of Crohn’s disease, and his widow, Jennifer Kathleen Margaret Robertson, has claimed to be unable to access the cold wallets of QuadrigaCX, which are on his laptop. Reports indicate that there are $180 million in digital assets stored here.
On Tuesday, the Nova Scotia Supreme Court rules that QuadrigaCX would receive protection from creditors as lawyers sought a “sense of stability” in the case. Allegedly, multiple threats of legal action have already occurred as a result of investors that have taken part in the platform.
Since the death of late CEO Gerald Cotten, his widow has opted for collateral mortgages on four jointly own properties. While they were left to Robertson in the will already, she chose to remove Cotten from ownership of the properties at the end of January, which are collectively worth $1.1 million now, prior to the collateral mortgages. Ownership of at least two properties have subsequently been moved to The Seaglass Trust.
However, there is no publicly available information on this trust, and other properties may already be covered by it as well.
The properties in question were purchased between 2016 and 2018, which included the primary residence of Robertson. As of yesterday, the residence had a “sold” sign out front. The rest of the properties are sections of land, of which two are covered in the trust.
Daren Baxter, who primarily works with trust and estate planning at a firm in Halifax, would not comment on the intentions of Robertson, but said that these actions are common for individuals seeking to protect their investments from creditors in the future. Baxter further elaborated, saying,
“You might be setting yourself up for a fight with creditors in the future but if I was the client, I’d much rather have all this structure set up, so I don’t automatically lose the property to the creditors. I put a big roadblock in the way, they probably have to go to court and try to challenge all this, it’s a big hurdle and gives (the client) some negotiating power.” He added, “Is it a good move from a legal perspective? Absolutely.”
A representative from the Hull & Hull law firm, Paul Trudelle, said that a personal attack against Robertson would be rather difficult to see through.
Essentially, unless QuadrigaCX is determined to be a scam, the directors and shareholders aren’t at risk. However, the actions that Robertson are taking now – i.e. moving the properties to a trust – is a suspicious decision.
Trudelle commented, “To the extent possible she’s trying to protect her personal property and in particular her interest in these properties […] but there’s a big question of what her personal liability would be.” He added, “She gets that (property) free and clear of any claims, unless there’s some fraudulent reason to set side the right of survivorship. It’s very hard to pierce the corporate veil and go after the directors or shareholders unless it’s obviously a scam or fraud.”
Presently, according to a ruling by the court yesterday, the exchange has a protective order that prohibits creditors from going after the company for the next 30 days.