Garry Cotten’s widow is seeking a C$300,000 refund. This money was used to keep creditors away from QuadrigaCX. Jennifer Robertson had spent the money to keep assets from being sold to fund creditors. The protection order kept exchange’s assets from being liquidated. After the sudden death of Mr. Cotten, the exchange owes people more than C$260 million.
Quadriga, based in Vancouver, has been under creditor protection since February 5th. Ernst & Young acted as a third-party monitor. It has been sifting through the exchange’s records.
Interim Gap Financing
Mrs. Robertson provided the ‘interim gap financing’ money. Around C$150,000 of the money went to professional fees for the Companies’ Creditors Arrangement Act (CCAA). The rest of the funds were used for hiring new directors.
Bloomberg reported that Mrs. Robertson has asked for repayment of the funds. The money is currently being kept in a ‘Shareholder Advances’ account, whose total balance is $24.7 million.
Court Protection Extended
Cotten’s widow requested back the funds at a time Nova Scotia’s Supreme Court Justice, Michael Wood, made a ruling to extend the court protection period. The protection period ends on April 23rd. In addition, the court-appointed Peter Wedlake to be the CRO for the firm.
Filed cash flow data showed that the refund was ‘contemplated,’ according to Bloomberg news.
The refund bid drew anger from creditors. Quadriga still owes creditors over C$260 million in cash and crypto. According to the creditor’s law firm, Cox & Palmer, the request is not appropriate. Per a letter from Gavin D.F. Macdonald,
We are concerned about the repayment by the applicants of C$300,000 to Ms. Robertson in the first week of March contemplated by the filed cash flow projection.
The letter goes on to say that Ernst & Young had asked for information about assets and cash flow from Cotten and Robertson’s lawyers. It advised that Mrs. Robertson should not get payment from the estate until a period when the monitor has reviewed the said documents.
Conflict of Interest
Mrs. Robertson’s role in the firm was a conflict of interest from the get-go. The source of the funds that she used should be separated from the original QuadrigaCX equity. The issue is mired in controversy, with creditors being increasingly agitated with time.
Do you think Jennifer Robertson should be refunded her money? Let us know in the comments section below.