Two days after after MtGox filed for bankruptcy, an update has been issued today on what remains of their website. The update, first printed in Japanese, states their application to commence civil rehabilitation proceedings. The presence and preference of a Japanese version is a sober sign of a new era at MtGox, one where their voice is subject to the whim of the courts and where they no longer call the shots:
March 2, 2014
To anyone concerned
MtGox Co., Ltd.
ANNOUNCEMENT REGARDING AN APPLICATION FOR COMMENCEMENT OF A PROCEDURE OF CIVIL REHABILITATION
An overview of the situation should be published here shortly (probably on March 3, 2014 (Japan time)).
A call center has been established to respond to all inquiries. The call center is planned to start on March 3, 2014. All inquiries to MtGox Co., Ltd. should be made to the following telephone number:
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Telephone number +81 3-4588-3921
Working hours Monday to Friday 10am to 5pm (Japan time)
Please refrain from contacting the office of the supervisor/investigator.
At news conference at the Tokyo District Court on Friday, Karpeles apologised but maintained a hopeful tone, saying, “The bitcoin industry is healthy and it is growing. It will continue, and reducing the impact is the most important point.”
Indeed, today’s update takes on a new meaning: In stating their application for “civil rehabilitation”, they view their situation as somewhat remediable; they are not immediately written off as a lost cause. According to Teikoku Databank, it is a “rapid rehabilitation before a corporate failure becomes more serious”. The definition of “bankruptcy” has a wide scope in Japan, and includes any “company that is experiencing difficulties in its management and that can no longer discharge liabilities it must pay off”.
Civil rehabilitation was instated in 2000. It provides for any type of entity to apply for rehabilitation, an expanded version of Corporate Rehabilitation which is restricted to “a listed company or a large company”.
MtGox’s stated course of action is far cry from full-scale liquidation where all assets are converted to cash and disbursed to creditors according to some assigned priority. Even though their assets barely match half their liabilities, apparently there may be a way to yield a greater recovery (perhaps re-opening the exchange under new management?).
According to Turnaround Management Association, 66.7% of civil rehabilitation applicants have been approved.