QuadrigaCX Director Asks Court to Appoint Restructuring Officer

Jennifer Robertson — the current director and widow of the founder of now-shuttered Canadian crypto exchange QuadrigaCX — has asked a Canadian court to appoint a chief restructuring officer (CRO) to handle proceedings in the aftermath of the exchange’s controversial closure.

In an affidavit filed with the Supreme Court of Nova Scotia on Feb. 25, Robertson further requested that the court grant a stay of proceedings extension of the current period of creditor protection.

As previously reported, Robertson’s spouse, 30-year-old Gerald Cotten, died in December 2018. At that time, the exchange reported that it was unable to access its cold wallet holdings, as Cotten had purportedly been the sole person with access to wallets’ keys.

With the allegedly inaccessible crypto accounting for the vast majority of the exchange’s assets, QuadrigaCX now owes over $198.4 million to an estimated 115,000 users. QuadrigaCX filed for creditor protection on Feb. 1, appointing Big Four audit firm EY to handle proceedings.

In her affidavit to the Supreme Court, Robertson outlined that in the wake of her husband’s death, she stepped in to serve as director of QuadrigaCX alongside Tom Beazley and Jack Martel — the latter of whom, she noted, resigned earlier this month. She continued:

“The remaining two directors, being me and Tom Beazley, have no significant experience in the cryptocurrency industry and no experience with an insolvent company. Further, the public attention my role as director has brought is unwanted, and online commentary which I have reviewed has suggested that I, in particular, am trying to hide assets or am acting contrary to the best interests of the companies, which is not true."

Robertson has therefore requested that Peter Wedlake, a senior vice president and partner with major accountancy and consulting firm Grant Thornton, step in to fulfil the restructuring role.

In her request for an extension of the creditor protection period — which was granted on Feb. 5  in compliance with Canada’s Companies' Creditors Arrangement Act — Robertson claimed that the directors require more time to recover QuadrigaX’s debarred assets.  EY forensic experts, payment processors and banks were also cited as needing more time for proceedings.

She argued that if the stay extension is not granted, the parties involved would be unable to complete their investigation, which “would be prejudicial [...] to all stakeholders [...] as well as ending any discussions regarding the potential sale [...] of the [Quadriga] trading platform.”

As recently reported, Canadian banks have showed hesitation concerning the management of QuadrigaCX’s funds, citing concerns over the uncertainty of their origin. A lawyer representing EY echoed the banks’ position, alluding to alleged money laundering issues.