QuadrigaCX Is Still Looking For The Millions Of Crypto Assets Missing, Earning Another Court Extension
QuadrigaCX Is Still Looking For The Millions Of Crypto Assets That They’ve Lost, Earning Them Another Extension In Court
QuadrigaCX’s court case for the retribution of funds to consumers has gone on for months, and they have already been granted a 30-day stay to protect them from creditors as they find the funds hidden amongst cold wallets. The search seems to be taking much longer than originally anticipated, and the Canadian judge overseeing has just given them another 45 days. Presently, the platform is supposed to be seeking out about $140 million worth of crypto.
The judge, Michael Wood of the Nova Scotia Supreme Court, believes that the stay that the company received a month ago should be extended for just under 45 days. He has since rescheduled the hearing to April 18th, and the creditors that aim to go after the company will not be able to do so until the stay ends.
The attorneys for QuadrigaCX explained that the company is making some headway on their investigation, according to court documents on Tuesday. Maurice Chiasson, from the Stewart McKelvey law firm, said that the longer time frame is in the best interest of everyone. He has been in charge of the representation of QuadrigaCX since the original request for creditor protection in January.
Elizabeth Pillon, an attorney from Stikeman Elliott that represents Ernst & Young as Quadriga’s monitor, said that the companies are in the recovery stage for both data and assets. Pillon explained that the additional “breathing room” would give them the time and space that they need to continue their work.
Along with the approval of the additional research time, Judge Wood also approved the request to appoint a chief restructuring officer (CRO). The request for such an offer was submitted by Chiasson on behalf of CEO Gerald Cotten’s widow Jennifer Robertson since she didn’t have the experience of running this type of company. The CRO will be responsible for the management of the exchange and connected companies as the recovery process continued.
Adding to his reasoning, Chiasson explained to the Court that Robertson did not want all of the public attention that she had received as a result of taking on the position. Her role as the executor of Cotten’s estate could also be a conflict of interest, which supports Chiasson’s request for some “separation” between Robertson and the case.
If the CRO duplicates what the Ernst & Young firm has already done, there is a risk of adding to the creditor’s costs. However, a compromise was reached between all companies and representatives in the case that the CRO would only be directed by the law firm to ensure that not duplication took place. The soon-to-be CRO is Peter Wedlake, who plans to bill at an hourly rate to reduce costs.
Other orders were submitted at this point as a way of collecting more data about exactly what has occurred within the exchange. Amazon Web Services, for example, much turn over any data that relates to the QuadrigaCX platform and Cotten. While Amazon has been forthcoming, a court order was required to address Cotten’s personal account, since it wasn’t created with the business named.
Payment processors were also the subject of several orders since none have turned over any of the funds to the exchange or EY. It will end up being necessary for multiple representatives of these payment processors to show up in person, but a telephone call is acceptable for now. However, the repayment of Robertson for the $300,000 CAD ($225,000 USD) in the CAA process was ultimately deferred.
The details of the QuadrigaCX case are complicated, at best, considering that the business’s restructuring is much different from other businesses. There have even been suggestions of the platform being sold off multiple times, which is still an option on the table. If these difficulties continue or worsen, there is a chance that bankruptcy may be better to file than the creditor protection under the CCAA. Judge Wood even commented that these changes appear to be more “like an end process.”