QuadrigaCX Court Issues Continue As Conflict Of Interest Is Exposed Regarding Former Law Firm

QuadrigaCX Court Issues Continue As Conflict Of Interest Is Exposed Regarding Former Law Firm

The legal representation of QuadrigaCX has been a problem. Weeks ago, the law firm Stewart McKelvey and Jennifer Robertson had parted ways in the case, which Robertson credited to a conflict of interest. Robertson, the widow of founder Gerald Cotten, had not specified what the conflict was at the time, but a letter to the creditors on Wednesday reveals that the conflict was representing both QuadrigaCX and Robertson.

The letter was sent to creditors by Miller Thomson, one of the two firms that is presently assigned as the counsel to the customers. Stewart McKelvey had withdrawn from the case officially on March 13^th, saying that there was a “potential conflict” that arose by other parties. As shared by the letter from Miller Thomson, which was confirmed as real by the firm, the representative counsel and monitor Ernst & Young both had concerned about Stewart McKelvey’s representation of the exchange and the widow.

In the document, records show that the council had sent two letters in regard to their dissatisfaction, while the monitor expressed the same. Ultimately, the attorneys at Stewart McKelvey finally “acknowledged the conflict,” choosing to withdraw as counsel. However, the original plan was simply to create a proposal to address the concerns. Going forward, Robertson personally will continue to be represented by the law firm, even though QuadrigaCX will not.

To determine the next steps, a conference call was held on March 18 between Miller Thomson, Cox & Palmer, Nova Scotia Supreme Court Justice Michael Wood, Stewart McKelvey, EY and Peter Wedlake. Wedlake was recently appointed by the courts as the chief restructuring officer for Quadriga. The communication from Miller Thomson states that these entities plan to be back in court to discuss the next steps in the proceedings regarding the Companies’ Creditors Arrangement Act “as early as next week.” However, no official recording or transcript was provided from the conference call.

Originally, the filling for creditor protection was submitted at the end of January for QuadrigaCX by Stewart McKelvey. At the time, the exchange stated that there was no way to access over $136 million that was allegedly being held as cryptocurrencies in cold storage wallets. Since these reports, there has been speculation that no such holdings even exist.

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