Lawyers for the users of Canadian cryptocurrency exchange QuadrigaCX say the court should delay appointing a chief restructuring officer.
Quadriga was granted creditor protection last month after the death of its chief executive, Gerald Cotten. Mr. Cotten was travelling in India in December when he succumbed to complications related to Crohn’s disease. Since then, the Quadriga trading platform has been shut down and 115,000 customers are owed a total of $250-million in cash and cryptocurrency – $180-million of which is missing. Mr. Cotten was the only one who knew how to access the funds, his widow, Jennifer Robertson, said in an affidavit filed with the court.
Ms. Robertson, who became a director of Quadriga after her husband’s death, last week asked for the appointment of a chief restructuring officer (CRO) owing to the “unwarranted” public attention she has been receiving, including accusations of hiding assets from creditors.
In a submission filed with the court Monday, Cox & Palmer – which, alongside Miller Thomson LLP, represents Quadriga’s affected users – say they aren’t opposed to the concept of appointing a CRO. But such a decision should be delayed until the official committee of affected users has been assembled and can weigh in on the matter, Cox & Palmer argue.
The submission comes one day ahead of a scheduled hearing at the Supreme Court of Nova Scotia to determine whether the 30-day stay of proceedings against Quadriga issued by Justice Michael Wood last month will be extended.
“While there may be benefit to the appointment of a CRO, we do not see urgency as to the need for it to be appointed at the time of the [March 5] hearing,” Cox & Palmer argue in their submission. “In our view, this issue can and should be adjourned to a later date.”
The lawyers also added they were “surprised” to read in the latest report by Ernst & Young that the court-appointed monitor still has not been provided with complete access to Quadriga’s platform data, which include user account balances and transaction information. Amazon Web Services has told Ernst & Young it is unable to provide the data because the account is in Mr. Cotten’s name rather than the company’s. The monitor is seeking a court order to resolve the issue.
“In our view, such access is essential to the Monitor carrying out the tasks set for it by the Court in the Initial Order and subsequent orders,” Cox & Palmer wrote.