There are three main options that have been discussed in the Mt. Gox Legal forums. Although none of these three plans quite describe what our eventual plan looks like it will be, they’re presented here for reference.
Option A
Prioritize fiat claims, but cap them at 100% plus interest, distribute the rest pro rata to creditors according to their BTC claims. Fiat claims are reimbursed in full, BTC claims receive whatever is remaining.
Advantages
- Compromise between options B and C
- Everyone does better than they would have under liquidation
- Depositors rightfully receive the majority of the surplus, rather than non-depositor creditors
Disadvantages
- Claims denominated only in fiat currencies are limited in their ability to benefit from the surplus
Option B
Pro rata distribution of all assets based upon trustee’s initial valuation of claims: Fiat claims get many times their original claims, BTC claims get about 90% of what they’d receive from option A.
Advantages
- Surplus is evenly divided among all creditors according to the size of their claims at bankruptcy
- Doesn’t require selling any BTC, which could create a BTC price drop
- Will work even in the event of a sudden BTC price shock
- Every creditor does better than they would have in liquidation
Disadvantages
- Fiat claims receive many times their fiat balances, while BTC claims receive only a fraction of their BTC balances
- Non-depositor fiat claims (ie Tokyu Construction) would also have their claims tied to BTC price
- At a valuation of $483/BTC, Coinlab’s claim might be worth 156,250 BTC
Option C
Revalue BTC claims using today’s prices and divide assets pro rata: Fiat claims and BTC claims get the same fraction returned.
Advantages
- Treats all creditors equally
- Pays out the same fraction to all balances, no matter what currency they were denominated in
Disadvantages
- Does not meet the criterion that it “be in the best interests of creditors” since many creditors, particularly ones with balances denominated primarily in fiat, would have benefited more from liquidation
- Probably dead in the water
The Actual Plan
It seems as though the plan that we’ll eventually move forward with will look more like “Option A” than either of the other options, but with some key differences. Since we’ve learned that Kobayashi has sold enough bitcoins to pay 100% of liquidation claims at their original valuation, we expect all creditors will be paid at least that amount in fiat. The remaining bitcoins would probably then be distributed pro rata to bitcoin claims. So anyone with a fiat claim would receive their full balance in fiat, and anyone with a bitcoin claim would receive a combination of both fiat and bitcoin. It remains to be addressed how and when those distributions will happen though, and plans remain tentative.
