CoinLab Agrees to Support Mt. Gox's U.S. Bankruptcy Efforts

Bitcoin company CoinLab Inc. has thrown its support behind Japanese bitcoin exchange Mt. Gox's U.S. bankruptcy case, a change of course for CoinLab, which has sued Mt. Gox for $75 million, The Wall Street Journal reported. Lawyers for CoinLab said in court papers Friday that they wouldn't object to Mt. Gox's formal request for U.S. bankruptcy protection, despite earlier hints that they might challenge that request. Court documents offered no explanation for CoinLab's decision. Japanese insolvency expert Nobuaki Kobayashi, who is leading Mt. Gox's bankruptcy in Tokyo, said that official recognition of Mt. Gox's U.S. bankruptcy case would give him more authority over developments in the U.S., such as a proposed settlement with angry Mt. Gox customers. Mt. Gox's Chapter 15 bankruptcy case, filed in Dallas, hasn't yet secured an official nod from Judge Stacey Jernigan. In Chapter 15 bankruptcy cases, company officials have to prove that a legitimate court proceeding is taking place in a foreign country before a U.S. court can recognize the case. U.S. court recognition provides foreign companies with U.S. bankruptcy protections like the automatic stay, which blocks creditors from seizing assets or pursuing lawsuits against a debtor. Read more. (Subscription required.)