Mt. Gox Parent Company Seeks to Expand Bankruptcy Protection to the US

By Jacob Cohen Donnelly Feb 6, 2015 4:17 PM EDT

Mt Gox Bitcoin

NEW YORK (InsideBitcoins) — He may not be Dread Pirate Roberts, but Mark Karpeles’ problems are still far from over. Tibanne Co., Ltd., the holding company that Karpeles launched in 2009, has filed for Chapter 15 bankruptcy protection in the United States.

According to a court filing submitted on February 3, 2015, the company’s lawyers requested that the U.S. courts recognize that the company is currently undergoing bankruptcy in Japan. According to the U.S. Courts, “The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country.”

In this case, Tibanne Co. is currently undergoing bankruptcy in Japan, so the company wants to have current legal action being pursued against it paused. Once the bankruptcy is resolved in Japan, then those proceedings can commence.

[Read More: While Mt. Gox Was Burning, Karpeles Was Heading Home for the Weekend]

“Tibanne was established in October 29, 2009 as a corporation organized under Japanese Law. In its documents, and communications to customers, investors and creditors, Tibanne has consistently represented that it is a Japanese corporation subject to Japanese law,” the filing said. “Tibanne is solely owned by Mark Marie Robert Karpeles who resides in Japan. Tibanne is the parent corporation of Mt.Gox Co., Ltd., a Japanese corporation that always shared office space with Tibanne in Tokyo, Japan. Tibanne holds an 88% equity interest in MtGox, with the other 12% held by Jed McCaleb.”

McCaleb sold Mt.Gox to Karpeles in 2011. “In turn, MtGox is the parent corporation for and holds 100% of the equity interest in Mt. Gox North America Inc., a New York corporation. Moreover, MtGox North America is the parent corporation for and holds 100% of the equity interest in MtGox Inc., a Delaware corporation.

The argument this filing is making is that Tibanne, a Japanese company, owned the Japanese parent company to the American subsidiaries of Mt.Gox; therefore, it should be prosecuted under Japanese law first.

“Tibanne has extremely limited liquid assets at this time. Whatever limited funding it received from MtGox or otherwise was largely used to pay a retainer to its attorneys that is held in a New York account for purposes of filing this request for recognition and provisional relief,” the filing said. “Tibanne therefore cannot retain attorneys or other professionals necessary to defend or pursue actions or claims.”

All of this now requires a judge to determine whether the claim put forth by Tibanne is valid for a Chapter 15 bankruptcy.

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