Well sadly Stephen was misinformed and likely turned a bad situation into a worse one. His talk of injunctions and criminal activity were simply false. I am just not certain if it was coming from a place of intentional malfeasance or simple ignorance.
Here:
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But once a corporation reaches insolvency, the fiduciary duties that once flowed to equity-holders divert instead to creditors. Again quoting the Delaware Supreme Court, "the corporation's insolvency makes the creditors the principal constituency injured by any fiduciary breaches that diminish the firm's value.
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But once the moment of insolvency arrives, as the Delaware Court of Chancery has explained, "the creditors become the enforcement agents of fiduciary duties because the corporation's wallet cannot handle the legal obligations owed." The court continued: "Because, by contract, the creditors have the right to benefit from the firm's operations until they are fully repaid, it is they who have an interest in ensuring that the directors comply with their traditional fiduciary duties of loyalty and care."
- http://www.faegrebd.com/8365
tl;dr: Things change when your organization becomes insolvent.
I am not a lawyer, but I'm aware that in the U.S., bad things can happen to you as an officer or director if you then take action after establishing insolvency that ends up further harming your creditors -- especially actions which might favor one creditor over another. Now customer funds are even more sacrosanct. My argument was that legal counsel should be obtained BEFORE paying out one single dime.
Roman had reopened the site to allow ACH withdrawals so I was making the argument that the only way to stop it was to get an injunction filed.
Personally, I don't have that many BTC involved and have already mentally booked mine as a total write off. I could see though how Roman might be persuaded because releasing USDs to depositors would mean some people (those with USD balances) would be less pissed off -- though others (those with BTC balances), would be more pissed off. But an insolvent organization no longer does what is best for the company or for its shareholders and instead is in dire need of legal advice before taking further action.
It looks like that might be what then happened.
I hope to cover this stuff for my Open Transactions server by taking the position that although the tokens representing assets are intended to do so in a non fractional reserve manner, nonetheless the actions of theives, acts of god, force majeur etc could contrive to force some of those tokens into being fractional (or even zero) reserve; but that each type of token is independent such that loss of dollars to back dollar tokens would cause only those tokens into being less thasn full reserve, whereas tokens representing assets not lost would remain fully backed.
Not sure how long it would take though for the system to earn itself enough moneu to have that cast into legally airtight form...
-MarkM-
