Basic Policy for Preparing a Rehabilitation Plan (as of June 29, 2018)

We are currently considering the basic policy for the rehabilitation plan that  is as stated below.  The rehabilitation plan outline we have prepared is merely a proposal as of this point in time.  We would like to hear your opinions, as creditors, and revise this basic policy to prepare a rehabilitation plan which reflects creditor opinions to the fullest extent.

Your opinions are accepted by making comments on this article, sending e-mails to “mtgoxforcreditors at-mark gmail.com” (please change “at-mark” to @ when you send email), )  or sending letters.  We look forward to hearing your opinions.  Please provide your name and filing number so that we can identify you as a creditor.  You can also use the comment box on the website at the bottom of this page.

 

[Basic Policy for the Rehabilitation Plan]

  1. The rehabilitation plan should be simple and the implementation thereof should have high certainty.
  2. No distribution will be made to shareholders.
  3. Distribution of assets to creditors will be made in kind, meaning for creditor bitcoin (BTC) claims, payment will be made in BTC and its derivatives (including but not limited BCH).
  4. First payment to creditors will be made promptly after the approval and confirmation of the rehabilitation plan (according to the standard schedule, approximately 5 months after the commencement of rehabilitation proceedings).

  5.  The full payment to the monetary creditors will be made.

  1. If there are any residual assets, or new assets are found, additional payment will be made.
  2. No sponsor will be selected in principle, except where it is apparent that such selection is advantageous to creditors.

 

[Concept of the Basic Policy]

  1. The rehabilitation plan should be simple and the implementation thereof should have high certainty.

In order to make the first payment as soon as possible, the rehabilitation plan should be simple.  If the rehabilitation plan is complicated, interest adjustment among interested parties will be necessary, and delay in the approval of the rehabilitation plan will be a concern.  Also, a complicated rehabilitation plan is difficult to understand, and is not friendly to many creditors.  We are of the opinion that it is important to make the rehabilitation plan as simple as possible, approve it at an early timing, and make payment to creditors as soon as possible.

In addition, in order to ensure payment to creditors, we are of the opinion that the rehabilitation plan should have content of implementation which is highly certain and which is realistic, considering rehabilitation proceedings practices in Japan.

 

  1. No distribution will be made to shareholders.

Mt.Gox is not capable of returning all BTC deposited by creditors. Accordingly, we consider that all assets of Mt.Gox should be distributed to creditors and not to shareholders.

 

  1. Payment for bitcoins (BTC) will be made in BTC and its derivatives (BCH, etc.).

We consider it appropriate to make payment to creditors who had been depositing BTC (BTC creditors) with Mt.Gox, in BTC and its derivatives (BCH, etc.), instead of cash.

This is because making payment to BTC creditors in BTC, etc. is the most simple and efficient way and transaction costs such as bank fees can be minimized (this is the very advantage of BTC). Also, if payment is to be made in cash, it will be necessary to exchange a large amount of BTC, etc. for fiat currency, which may result in decline of the price of BTC, etc.  Further, as the price of BTC, etc. fluctuates rapidly, it is difficult to determine when to sell BTC, etc.

 

  1. First payment to creditors will be made promptly after the approval and confirmation of the rehabilitation plan.

Creditors have been waiting for payment to be made for as long as 4 years since Mt.Gox was bankrupted. Needless to say, payment to creditors should be made as soon as possible.

We are of the opinion that most of the assets, including approximately 166,000 BTC and 168,000 of BCH and other derivatives, if any, currently held by Mt.Gox, should be paid to creditors at the time of the first payment.

 

     5.The full payment to the monetary creditors will be made.

In the Examiner’s report, the Examiner considers that the civil rehabilitation of MT.GOX shall commence, assuming that the following measures are taken before the decision to commence the rehabilitation proceedings (in other words, the discontinuation of the bankruptcy proceedings), that ensure the benefits of the bankruptcy creditors (especially those having monetary claims corresponding to bankruptcy claims) who filed proofs of claims in the bankruptcy proceedings of MT.GOX.

To convert from the bankruptcy proceedings to the civil rehabilitation proceedings, we believe that it is the best for us to allow the full payment to the monetary creditors in the civil rehabilitation proceedings.  The total amounts of the monetary claims are much smaller than the amounts of BTC claims, so the full payment to the monetary creditors does not have significant impact on the distribution to BTC creditors.  Therefore, the full payment to the monetary creditors can be implemented in the plan.

 

  1. If there are any residual assets, or new assets are found, additional payment will be made.

At the time of the first payment, existence of some claims may still be disputed; therefore, it is expected that certain assets would have to be reserved at Mt.Gox until the amount of those disputed claims is fixed. In such case, we consider that those assets so reserved should be paid to creditors as additional payment.

Conversely, we think that payment should not be reserved until all of the assets/debts are fixed. Early payment should be realized by paying most of the assets that Mt.Gox has at hand to creditors as the first payment, as soon as possible, and then paying those assets/debts that are yet to be fixed, as additional payment.

Also, with regard to additional payment, we think that a scheme should be considered to realize additional payment at an early timing, under which additional payment should be made by fixing the amounts of the non-fixed assets/debts by transferring them to third parties, instead of waiting for all of such amounts to be fixed.

 

  1. No sponsor will be selected in principle except where it is apparent that such selection is advantageous to creditors.

There may be an opinion that we should find a company that supports financially and commercially Mt.Gox (“sponsor”). However, Mt.Gox has already suspended its business, and it is not in a situation requiring a sponsor to supplement its creditworthiness or to continue its operations.  It is not necessarily a requirement under the rehabilitation law in Japan to appoint a sponsor, although it is common, and we are of the opinion that a rehabilitation plan can be approved by the courts and creditors without a sponsor in this case.  In addition, a certain period of time would be required to find a sponsor, and a proxy fight may occur if there is more than one sponsor candidate.  Such a situation may become an obstacle to the achievement of our purpose which we consider the most important, namely, early payment to creditors.  We do not intend to completely deny finding a sponsor; however, we are of the opinion that a sponsor should not be selected except where it is apparent that such selection is advantageous to creditors and will not be an obstacle to early payment.

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