Quote from: ArticMine on September 12, 2012, 09:01:24 PM

Quote from: SgtSpike on September 12, 2012, 08:45:49 PM

Quote from: DeathAndTaxes on September 12, 2012, 08:30:19 PM

Quote from: ArticMine on September 12, 2012, 08:00:07 PM

Bold on the Chaang Noi (Goat) ช้างน้อย quote my emphasis. It is Bittalk Media Ltd, who is liable here. What we are talking about here is a corporation turning over some of its shares held in trust for one of its shareholders in exchange for some very questionable liabilities of the shareholder, without a right of offset, with multiple international jurisdictions involved and where the shareholder in question is at risk of bankruptcy! Talk about a legal hornets' nest. The legal fees to clean up this mess alone can easily bankrupt many a business start up.

I missed that but I still don't see how BitTalk is liable for anything. If Matt choses to trade some of his liabilities for the equity in BitTalk that is his choice. If he is insolvent (legal definition) and seeks bankruptcy then the tx could be voided but there is legal consequence. BitTalk could take a loss (in theory) but the odds of all that happening are essentially nil.

Ok, so here's a question:

In the event of a MNW bankruptcy, and assuming he still held partial equity in Bitcoin Magazine, what would happen to that equity? Would it be sold by the state at auction? Would it be offered for buyout to the other shareholders at the highest bid price? Would it be distributed to the creditors?

Also, are individuals treated the same as corporations when it comes to bankruptcy? If a person is known to be bankrupt soon, then they shouldn't pay anyone, but save what they have to be distributed to the creditors evenly? I've never heard of that happening in a personal bankruptcy case, so it just seems odd to me... I've never heard of anyone not being able to choose who they want to pay right up to the point that they make the official declaration of bankruptcy.

It would be up to the court and the bankruptcy trustee to sell or transfer that equity for the benefit of the creditors. There may be restrictions of the sale of the equity that would give the remaining shareholders first rights, options to purchase etc. This type of agreement is not uncommon in business startups. As for payments to a creditor by a debtor in anticipation of bankruptcy, these can be reversed in many cases by the other creditors.

To confirm, those payments can be reversed even in the case of personal bankruptcy?