[matthewarkin]

Basically what happens under bankruptcy is the trustee sells all the assets of the business. From that revenue, the trustee pays any costs related to the administration of the bankruptcy proceeding, whats left over gets distributed to the creditors.

[aloksudhakar]

Thanks. Creditors means Mtgox users like me who had BTC and currencies in mtgox? What if the trustee couldn't make an enough revenue to pay all the mtgox users?

[matthewarkin]

Yes, Creditors are people who Mtgox owes money (you've extended a line of credit of X bitcoins or fiat to them). This is really not a what if. The whole purpose of bankruptcy is because the entity can meet all its financial obligations, if the trustee could make enough revenue to pay all the users than company assets (bitcoins in wallet) would equal company liabilities (bitcoins that belong to users). After all the stuff is sold, and expenses related to the administration of bankruptcy proceeding is paid, the remaining funds is distributed in an order of priority to the creditors (so back wages normally have priority to other liability). Assuming all users are in the same priority level, it would be a safe judgement to assume that each user would get a percentage of the remaining funds = user's number of bitcoins / total number of user bitcoins. This is how it works in the US at least, I'm not versed with Japanese bankruptcy protection laws but assuming its similar, you'd be lucky to get a portion of the money you're owed. If I recall correctly, they owed about 700,000 in btc and they found 200,000, assuming no other assets / liabilities / expenses you'd get 28% of your btc/fiat back.

[aloksudhakar]

Sir,Thank you so much for the taking your time to make a better explanation.! I really hope I could get back at least 50% of what I lost with Mtgox.!!

[AndyJ1972]

The pot is divided up proportionally to how much each person is owed, so everyone gets a fair share.

So you get $1 for every $5 you are owed for example.

[asuffield]

This is not necessarily true. Bankruptcy proceedings are complicated, but some creditors may have a legal preference - that means they get paid their debt in full, and everybody else then evenly shares what is left.

The government is usually entitled to this sort of treatment - the company's tax bill and fines will likely have to be paid in full before everything else is shared out. But this is being conducted under the bankruptcy laws of Japan, which I know nothing about. Ask a lawyer if you want to know.

[AndyJ1972]

Not in the UK in General, the Government lost it's preferential creditor status several years ago.

The result of which is that they chase their debts a lot quicker and a lot harder than they did before.

I too know nothing of Japanese bankruptcy laws.