Plaintiffs, Defense Team Battle Over Bitcoin Laptop After Murder
This lawsuit comes from our neighbors to the north. A college student was convicted of second-degree murder after a drug deal went wrong. The student was also convicted of disposing of the body. The family of the victim filed a wrongful death lawsuit against the convicted murderer after it became known that he had a laptop with Bitcoin on it. According to the convicted murderer, he had purchased around $10,000 in Bitcoin and that had appreciated to over $200,000. He filed a petition with the court to access the laptop. He told the court he needed the money to pay his legal defense team. He further told the court that if he could not access the laptop, that money would be gone forever.
However, before that money could be disbursed to the defendant and his legal team, an attorney representing the family of the victim blocked the move and clouded title to the money. The family believes that money should go to them after they win a wrongful death lawsuit against the defendant. Indeed, with a conviction in criminal court, the US courts would presume the defendant was guilty under the lower standard in civil court. That would mean that the plaintiffs would only have to argue damages.
How would this play out in the U.S.?
There would be a rush for the plaintiffs to get a judgment against the defendant before he could get to his Bitcoin. Typically, a plaintiff wants to move as quickly as possible to avoid the defendant divesting their assets somewhere they cannot reach. If the plaintiffs can get access to the money, file an injunction to prevent the money from being disbursed to the defendant, and then win their suit, they would also have to file a second lawsuit to recover the judgment. At that point, they have the defendant where they want him.
However, the situation is not perfect. The defendants assets would be placed into a bankruptcy trust and no single creditor would be placed before another in the hierarchy of payment. That means the defendant’s lawyers still have a valid claim to that money. Ultimately, a bankruptcy trustee would divide any assets from the plaintiff’s estate among the creditors. In this case, it would be the defense team and the wrongful death plaintiffs. So, if the Bitcoin is worth $200,000, they may be able to split that in half depending on the value of each of their claims.
How would that be decided? Well, if the defendant owed each party $100,000, it would be perfect. However, it is more likely that the plaintiffs will be getting more money than the defense team. Let’s say $1 million for wrongful death and $40,000 for the defense team. So, for everyone $1 the defense team received, the plaintiffs would receive $25.
Assuming there is $200,000 in the Bitcoin wallet, the defense team would get $8,000 and the plaintiffs would receive $192,000 minus any fees paid to the bankruptcy attorney and the cost of filing.
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