Jennifer Robertson, the widow of Quadriga Fintech Solutions Corp. founder Gerry Cotten, is seeking repayments of her costs. He spent $225,000 to help the former cryptocurrency exchange secure court-approved protection from its creditors, thus helping the keep millions of dollars in payments to clients at pay. Robertson now wants to be repaid the costs.
Creditor Protection for the Canadian Firm
The Vancouver-based Quadriga has been under creditor protection since Feb 5. The amount Robertson wants in repayment was paid to Ernst & Young for acting as the monitor to sort through the company’s dealings. According to a court filing from January, the money was paid as “interim financing” from the estate and half of it was utilized to pay professional fees related to the filing of the Companies’ Creditors Arrangement Act and appointment of new directors for the company.
The firm is planning C$24.7 million in a disbursement account. According to a latest Ernst & Young report, the monitor intends to make the disbursements when Quadriga directs it to fund the proceedings. The company is currently being overseen by Robertson as a director. Her step-father Tom Beazley is also serving as a director in the company.
The cash flow report signed by Robertson on March 1 includes C$1.1 million in disbursements including the C$300,000 to be paid for “repayment of shareholder advances” as the biggest amount. She also includes a C$200,000 payment for Ernst & Young, C$250,000 payment for its lawyers, C$229,842 for the crypto company’s law firm and another C$17,000 towards payments to independent contractors.
Creditors Unhappy With the Proceedings
The matters were raised during a Tuesday court hearing in Halifax but were deferred for the next day. The Nova Scotia Supreme Court Justice Michael Wood, meanwhile, agreed to extend the company’s court protection till April 23. He also appointed Peter Wedlake the senior vice president. He will work with Grant Thornton to become the chief restructuring officer for the firm. The firm is yet to pay C$260 million in cash and crypto, and the creditors aren’t happy with the turn of events.
Cox & Palmer partner Gavin D. F. MacDonald said in a recent letter:
“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.”
He also wrote that the monitor had sought information regarding the transactions and asset from the law firm representing the Cotton’s estate.
He went on to write
“The repayment contemplated by the cash flow is inappropriate until such time as the monitor has reviewed the requested information and satisfied itself as to the source of funds used to fund the CCAA proceeding.”