Bitcoin has become a worldwide craze, and the failure of the Mt. Gox Bitcoin exchange rattled the entire market for the cybercurrency. But when Mt. Gox filed for bankruptcy protection in the U.S., it used an unfamiliar form of filing known as Chapter 15. Why did Mt. Gox choose that form of bankruptcy protection, and what does it mean?
In the following video, Dan Caplinger, The Motley Fool's director of investment planning, explains Chapter 15 bankruptcies. Dan notes that most people are familiar with Chapter 11 reorganizations or Chapter 7 liquidations, with Chapter 9 municipal bankruptcies also climbing in public awareness lately. But as Dan says, Chapter 15 is used to coordinate international bankruptcy proceedings, with Mt. Gox having filed in Japan last month and now seeking to protect U.S. assets from separate actions outside Japan. Opponents argue that Mt. Gox's filing is a ruse, but the idea behind Chapter 15 makes sense to avoid international economic incidents.