Widow of QuadrigaCX Founder Seeks Compensation for Creditor Protection Court Costs
The widow of the founder of now-defunct cryptocurrency exchange QuadrigaCX has asked the court for $225,000 in compensation for legal costs, Bloomberg reports on March 4.
Jennifer Robertson, the wife of late QuadrigaCX founder Gerry Cotten, is seeking repayment for financing used to help the crypto exchange acquire court-approved protection from creditors. After $145 million in crypto assets went missing following Cotten’s death, Robertson provided interim financing for legal proceedings.
According to Bloomberg, Robertson paid CA$300,000 (~$225,000), which covered Big Four audit firm Ernst & Young’s (EY) appointment as a monitor to the legal proceedings, in addition to fees associated with filing under Companies’ Creditors Arrangement Act (CCAA) and appointing new directors. Currently, QuadrigaCX is reportedly overseen by Robertson and her step-father, Tom Beazley, as directors.
While the issue of repaying Robertson was reportedly discussed in court, the law firm representing QuadrigaCX’s affected clients, Cox & Palmer, took issue with the repayment. In a letter filed directly to the court, the firm argued that repayment should not be granted until EY has reviewed asset and transaction information from Cotten’s estate. Cox & Palmer states:
“In our submissions, the repayment contemplated by the cash flow is inappropriate until such time as the Monitor has reviewed the requested information and satisfied itself as to the source of funds used to fund the CCAA Proceeding.”
According to the Toronto Star, Supreme Court Justice Michael Wood has extended the proceedings for 45 days until April 23, and has approved the appointment of a chief restructuring officer to the exchange. He also directed the court monitor, Ernst & Young, to assure that fees for professional services will not be “out of control.” Any decision on repayments to Robertson was also deferred.
Last week, Ernst & Young found that QuadrigaCX’s cold wallets have been empty and unused since April 2018. The firm also discovered several user accounts that “may have been created outside the normal process by Quadriga” and that “[i]t appears that the Identified Accounts were created under various aliases.”
Recently, crypto research and consulting platform ZeroNonCense published a report claiming that QuadrigaCX stored a significant quantity of Ethereum (ETH) in other crypto exchanges, such as Kraken, Bitfinex and Poloniex.