Jennifer Robertson, the widow of QuadrigaCX’s deceased CEO Gerald Cotten, has asked the Nova Scotia Supreme Court to appoint a chief restructuring officer (CRO) to oversee the remainder of the insolvent cryptocurrency trading platform.
“In my opinion, direction of these issues can best be provided by a CRO who has access to cryptocuracrency expertise.”
– Jennifer Robertson
Last month, BetaKit reported on QuadrigaCX’s series of troubles, which have sent the cryptocurrency community into a tailspin. The unregulated company owes about 115,000 clients $250 million CAD in cash and cryptocurrencies following its demise.
Some of QuadrigaCX’s digital assets are locked away in a “cold storage” or “cold wallet” (which store the keys to send and receive cryptocurrencies), and according to court documents, Cotten was the only QuadrigaCX employee who knew the passcodes required to gain access to the cold storage wallets.
While it was previously reported that these cold storage wallets were holding about $190 million in cryptocurrencies offline, auditors at Ernst & Young found that these cold wallets have remained empty since April 2018, according to a report from Bloomberg.
Robertson has been in charge of managing the company’s remaining assets and recovering any lost crypto since Cotten’s death. She noted a CRO should be appointed because she and the company’s other director, Tom Beazley, lack significant experience with the cryptocurrency industry. She also expressed concerns that her role, as directed, has brought “unwanted” public attention, specifically pointing to “online commentary” suggesting she is acting contrary to the best interests of the company and is “trying to hide assets.”
In an affidavit filed with the Nova Scotia Supreme Court, Robertson also requested the 30-day stay of proceedings to protect QuadrigaCX from facing lawsuits, be extended.
“In order to continue to pursue the location of the assets, more time is needed,” Robertson said in the affidavit. “If the stay extension is not granted…the ability of the (Quadriga) companies to complete the investigation into the location and accessing the missing assets will also end, as well as ending any discussions regarding the potential sale of…Quadriga.”
Cotten, who was QuadrigaCX’s sole director, died on December 9 while travelling in Jaipur, India. Robertson, who was granted all Cotten’s assets in a will filed 12 days before his death, has asked the court to appoint Peter Wedlake, the senior vice president at audit firm Grant Thornton, as the company’s CRO.
“The (Quadriga) companies require ongoing direction relating to their affairs during the (insolvency) process and during an anticipated sales process,” Robertson says. “In my opinion, direction of these issues can best be provided by a CRO who has access to cryptocurrency expertise.”
In a hearing on March 5, QuadrigaCX’s lawyers will ask the Nova Scotia court’s judge to approve Wedlake’s appointment and extend the stay of proceedings by up to 60 days. Maurice Chiasson, a lawyer for QuadrigaCX, says appointing a CRO will “ensure that the interests of all stakeholders are protected” and concerns with Robertson’s “continued to day-to-day involvement with the (QuadrigaCX) companies” will be addressed.
On Tuesday, Nova Scotia Supreme Court Justice Michael Wood has granted the QuadrigaCX a 45-day extension for a stay of proceedings. He has also approved the appointment of a chief restructuring officer.
CTV News reported that another $70 million in cash is owed to QuadrigaCX’s users, and much of it is tied up in bank drafts held by third-party payment processors. The creditor protection will allow a court-appointed monitor to continue searching for the missing digital assets.