That policy does not make sense. Ignoring Usagi's trouble calculating what a NAV should be, at the time the contract was "signed" the NAV was below 1.0, so there should have been an imediate payment to bump the NAV up to 1.0.
Usagi, am I reading this contract correctly? When is BMF going to ask CPA for the insurance payment?
Or is it actually insurance to keep NAV above 1.0 USD, since you seem to like those so much?
Nah it's not in USD.
"2. CPA will not be liable for loss greater than 500 bitcoins."
Clearly says that the loss against which BMF is insured is denominated in BTC. Plus usagi has always stated nav in BTC anyway.
As far as nav being below 1.0 - it's pretty obvious that usagi did the insurance policy right when it had got nav back to or close to 1.0 (the last reported nav was .866 2 weeks before the insurance was agreed). Usagi specifically stated that signing the polict meant that "This contract means we will likely begin paying dividends again by next week."
You see the nature of the contract is such that it COULD be agreed when nav was actually slightly below 1.0 - in those circumstances they'd make an immediate claim on it, but CPA would still get 550 back from BMF long-term. If the initial payment needed were low (and BMF didn't collpase horribly like it did) then CPA would still make a tidy profit from it - and the deal could be viewed as making good sense for both parties.
I repeat: if you interpret the contract that way (and believed both BMF and CPA had rosy futures), then signing it make good sense for shareholders both parties. BMF got some immediate cash to restore NAV to 1.0, CPA got an income stream etc.
The problem came when both BMF and CPA then lost a ton of capital, CPA couldn't afford to cough up 500 BTC (in 5 chunks of 100 of course) and usagi decided to stiff the BMF shareholders to prop CPA up.
Signing the contract wasn't the problem (though it SHOULD have been properly explained and motioned as usagi represented the other party to it too). Not honouring it is a HUGE problem.
