The MtGox bankruptcy settlement situation demonstrates one more time that The Law Is An Ass.
It is pretty well established in western law that such settlements be conducted on a cash basis. It seems the Japanese courts administering the MtGox deal will hew to this doctrine. As such, creditors will likely be 'made whole' [sic] by awarding them the Yen value of their MtGox accounts, calculated using the price of Bitcoin on the date of receivership.
Of course, BTC has appreciated exorbitantly since then. Given this, MtGox's residual BTC holdings are well in excess of its debts as calculated as per above. Indeed, the recent sale has generated enough fiat to 'make whole' [sic again] the creditors. After this, there remains ~$1.5 B USD worth of crypto in the MtGox coffers.
Again using the established legal protocols, this BTC will likely be considered the property not of MtGox creditors (i.e., after they have been 'made whole' [sic *3]), but of MtGox itself. While the picture is still cloudy, this may result in the rather perverse situation that Karpeles exits this process a very rich man.
The good news is that the required selling would seem to be over. The questionable news is the fate of the remaining funds (i.e. ~3x-4x more than sold so far) remains in limbo, and may be sold at any time, given case disposition. The Vonnegut-esqe news is that a single individual -- either corrupt, incompetent, or both, but clearly undeserving in any instance -- may end up a billionaire.
The Law Is An Ass.
If the Court will reject the Civil Rehabilitation, and continue with bankruptcy, you would be mostly correct. But the Court seems likely to accept CR, it's more a matter of timing.
Please read this:
https://wiki.mtgoxlegal.com/en/home/frequently-asked-questions/I am copy-pasting here the Fisherman analogy from the page linked above, I think it's funny:
A rare type of fish (pisces bitcoinii) is caught every year, by local fishermen (depositors). The fish must be stored in a climate-controlled warehouse so that it will continue to taste good. Fishermen rent space in a common warehouse (Mt. Gox) that also serves as a market, to store their catch of fish during the last season. Some fish-buyers and fishermen also store money (fiat) in the warehouse for short periods of time, but the warehouse is mainly used to store fish (bitcoins).
One year, the warehouse owner (Mark) took a long vacation to Macau (did something irresponsible), and left nobody guarding the warehouse. While he was gone, 75% of the fish and all of the money were taken by thieves. The remaining fish are mixed up so it’s unclear who they belong to (unsecured assets). When the warehouse owner notices this, he declares bankruptcy.
The fish are taken by the bankruptcy trustee, who prepares to sell them and distribute the money from the sale to the fishermen. He takes a very long time though, because a bookie is demanding the fish be sold to pay the warehouse owner’s gambling debts (Coinlab). The next year, the fish that are caught are mostly infected with worms. The price of last year’s fish catch skyrockets, and is 50 times higher than the previous year! One of the largest reserves of this fish is in the possession of the trustee. And meanwhile, the fishermen are in danger of losing their boats because they have no money, and some have taken out loans with high interest.
The bankruptcy trustee proposes to sell all the fish, pay the fishermen based on last year’s price, and then give the remaining money to the warehouse owner. This outrages the fishermen, who believe that they should be the ones to benefit, since it is their fish that are now in such high demand. It was the warehouse owner’s negligence that caused the theft, and he would be made very rich indeed if the trustee’s plan moves forward. Meanwhile, the bookie is still wasting the court’s time, claiming the fish need to be sold to pay off the warehouse owner’s gambling debts.
The fishermen aren’t sure if next year’s catch of fish will be infected with worms or not. If they are, the price will go up even more, but if not, the price will plummet, and the fishermen would all like to be able to sell at least some of their fish while the price for them is high.
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