I'm surprised that people aren't commenting on the fact that the plaintiffs tried to negotiate a settlement which gave them an advantage over other creditors and were intentionally trying to prevent involvement of other Bitcoin depositors, courts, criminal and civil authorities. Had they been paid 100% of their claim in priority over other creditors, that fact would only have come to light in other legal proceedings (whether litigation or insolvency proceedings). Bitcoinica would have been prohibited by the terms of the settlement from disclosing that information, even though it would have meant there were less funds available with which to refund other users.
Our first offer was to accept back 80% of our claims immediately, and we'd simply forfeit the rest as an additional buffer to the rest of the claimants. This was proposed in response to Patrick's statement about having no margin for error, not being able to pay out any claims beyond 50% until all claims had come in, yet not being ever able to close the claims process. 20% of our claims should have been enough of a buffer to speed up the return of 100% of everyone else's claims. We'd still face the risk of clawback during receivership if it ever got to that but we were hoping our settlement offer would allow them to avoid that entirely.
The settlement offer that I posted was our final offer after all communication had broken down. At this point we had no trust at all in Bitcoinica/Intersango and we simply wanted to get as much money back under our control as we could before anything else stupid happened (like more funds being stolen). Again, if they went in to receivership, we could be forced to return any overpaid share of the money but at least it'd be safe with us during the process. We'd hoped that our offer would both push Bitcoinica to resolve the claims faster, and give them more room for error. If they resolved all the claims within 6 months and paid us an equal pro rata share, they'd have immunity from us. Coincidentally, the amount of funds stolen only 2 days after this offer was made was nearly 100% of what we were owed at the time.
The confidentiality provision in the document was there to protect Bitcoinica, who expressed concern over public perception of 'unfair' treatment. To us, it made more sense to pay back people who you were 100% sure of, and then take the time sorting out everyone else, especially if you intended to return 100% of all claims. Why take the extra risk holding on to all that extra money? All terms were negotiable but they weren't interested at all in anything other than their mission to spend the next 10 years returning small percentages of claims. We definitely weren't trying to get away with a larger cut of the total claims.. we were willing to sacrifice a huge chunk of money but we didn't want to wait forever.
Tihan and Zhou (unfortunately, powerless) were again keen to take the offer, however, Donald Patrick and Amir declined.
This actually confirms what was said by either Amir or Patrick regarding discussion about paying those most likely to sue first.
Should the plaintiffs prevail in the lawsuit, it would wipe out all known assets of Bitcoinica and then some - leaving nothing else for other creditors. It is likely, however, that Bitcoinica will have been liquidated by that time. I assume that some of the DOE defendants are expected to have deep pockets.
Bitcoinica has no assets to speak of. The only things possibly of value--the brand and the source code--were destroyed and given away. We can't win other customers' deposits. It's our expectation that a receiver will take over and distribute the claims and we'll get our cut of that, and anything we're short will have to come from the people found responsible.
