Judge Michael Wood, of the Nova Scotia Supreme Court, has granted the troubled exchange QuadrigaCX 45 days more to look for nearly $140 million worth of missing cryptocurrencies. The Canadian judge agreed to extend a stay of proceedings, first granted a month ago to further 45 days. The next hearing is scheduled for April 18. Notably, Creditors cannot sue the exchange until the stay expires or is lifted. Attorneys for Quadriga, Maurice Chiasson of Canadian law firm Stewart McKelvey, explained in the court on Tuesday
“We owe it to everyone in the process to go on as long as is reasonable.”
Chiasson has been representing Quadriga from the end of January when the company filed for creditor protection. Representing Quadriga’s court-appointed monitor Ernst & Young (EY), Elizabeth Pillon of Stikeman Elliott added that the companies are currently in the “data recovery, asset recovery” phase, and needed some “breathing room” to continue their efforts.
Appointment of The CRO
The widow of Quadriga founder and CEO Gerald Cotten, Jennifer Robertson have asked the court earlier to appoint a CRO ( chief restructuring officer), an individual who would manage the exchange and related companies and will with EY to recover the funds that Quadriga owes customers. Woods have had approved of the request at the time, Chiasson further explained that Robertson may also have a conflict of interest as the executor of Cotten’s estate. he told the court:
“There needs to be a bit of separation here.”
Woods expressed concern about the potential cost to creditors, particularly if the CRO duplicated work that EY already conducted. EY, Quadriga and the judge came to a compromise that the CRO would only conduct work at the direction of EY, preventing any such duplication and keeping costs low. The CRO to be appointed, Peter Wedlake, a senior vice president at Grant Thornton, will bill at an hourly rate, rather than charge a much higher monthly fee.
Reportedly, Amazon Web Services has Quadriga platform data in an account created by Cotten. Wood had ordered them to hand over any such data. An attorney for EY explained that Amazon isn’t opposed to providing the data, but it could not do so without the court order as Cotten, have had a personal account, rather than a business one.
The judge also wishes to speak with payment processors, who haven’t yet turned over any funds belonging to QuadrigaCX to either the exchange or EY. While some firms would have to appear in court in-person, Wood has agreed to speak to representatives of each processor via telephone for the moment.
Furthermore, He deferred any order on repaying Robertson the $300,000 CAD ($225,000 USD) that she initially paid into the CCAA process. Apart from this, attorneys with Miller Thomson and Cox & Palmer, a court-appointed representative counsel, updated Wood on their efforts to organize the exchange’s creditors.
As per Gavin MacDonald, of Cox & Palmer, around 800 individuals have reached out directly to the law firms. Out of them, 58 have expressed interest in becoming part of the steering committee, a group of creditors who would effectively direct the representative council.
Currently, the law firms are in the process of interviewing the applicants and plan to have a committee selected by the end of next week. Wood said that he would approve the committee, should EY agree to the members.