The decision made by the Nova Source Supreme Court Judge Michael Wood says that the QuadrigaCX, which has been running as per the Companies' Creditors Arrangement Act (CCAA) since the end of January will file for the Bankruptcy in the upcoming week.
To look back, the exchange initially filed for the creditor protection under the CCAA on Jan 31, stating that during this time that it doesn't access nearly $136 million in cryptocurrencies and required help regaining another $53 million in fiat held by the third party payment processors.
Before a week, the court has appointed an independent monitor, Ernst & Young. Ernst & Young said that “the possibility that Quadriga will restructure and emerge from CCAA protection appears remote.” Ernst & Young further recommended that the exchange should be declared bankrupt. Following its order, Michael Wood declared the firm Bankrupt.
EY's legal team also wrangled that the active restructuring process for QuadrigaCX under the Companies’ Creditors Arrangement Act (CCAA) to transfer to the alternative process under the Bankruptcy and Insolvency Act (BIA).
The latest decision approves EY very high investigative powers as a trustee under the BIA. This simply means that the firm might need the production of documents and testimony for witnesses. Apart from this, it will enable the firm to start selling its assets like trading platform, which would gain some revenue in order to make its customers.
Today Michael Wood also accepted a proper asset preservation order from EY, that expands to all the assets held by Jennifer Robertson, who is the wife of Quadriga’s late co-founder Gerald Cotten and the cotton estate. The order doesn't allow Robertson selling, removing and transferring any assets.
Even though the decision has been made to place QuadrigaCX in bankruptcy, the stay of proceedings protecting the exchange and its directors from lawsuits will be under process for some time. Further hearing to discuss increasing the stay was scheduled on April 18.
According to reports, Quadriga filed for the creditor protection after Cotton’s death and it lost access to cold wallets and its keys, that apparently held the assets owned by various clients. Presently, the exchange holds around $195 million.
In the previous month, law firms Miller Thomson and Cox & Planner build an official committee of affected users of exchange. The committee main purpose is to assist those users to fight against QuadrigaCX in the court.