The ongoing legal battle over the future of Mt. Gox took a sudden turn yesterday, when it was announced that Sunlot Holdings, the investor group seeking to buy what remains of the business, and lawyers representing the company's global consumer creditors had struck a settlement deal.

Under that proposal, former exchange users would support Sunlot's bid to buy and relaunch Mt. Gox in exchange for a 16.5% equity stake in the new business and settle with key defendants, including former Mt. Gox chief marketing officer Gonzague Gay-Bouchery and original site creator and equity stakeholder Jed McCaleb.

However, while potentially promising for frustrated former exchange users, the plan is not guaranteed.

As Jay Edelson, managing partner of the Colorado-based law firm heading the US class action suit, explained to CoinDesk, tomorrow's 1st May hearing will provide the first chance for the supervising judge to decide if the proposal moves forward, saying:

Still, Edelson is confident in the plan put forth by the international legal representation working on behalf of Mt. Gox's consumer creditors, and hopes it will be well-received due the benefits it could provide to former exchange users, some of whom have lost thousands or even millions of dollars in BTC as a result of the exchange's collapse.

"We think that the overall plan gives consumers and creditors the best chance of being made whole or even more than whole if things go well," said Edelson.

Speaking to CoinDesk, Edelson elaborated on the settlement, saying that it was effectively kick-started by the sudden 16th April decision by the Japanese courts to change the status of Mt. Gox's bankruptcy from a restructuring to a liquidation. As a result, Edelson said the timing of key efforts needed to be accelerated.

Edelson went on to describe how the combined legal representation of Mt. Gox's international consumer creditors and Sunlot worked day and night mediating the deal with a retired federal judge, in what he called a "larger process" than what has been portrayed in the media.

While the settlement would end the case against certain defendants, other prosecutions will move forward.

For example, Edelson said that lawyers representing international creditors will be continuing actions against CEO Mark Karpeles, Mt. Gox's parent company Tibanne, Japan-based megabank Mizudo and other as-yet-unnamed defendants.

Edelson suggested that the settlement could also improve the position of class members against these entities, stating:

Edelson also reiterated that the consumer creditors he represents will still be pursuing the funds allegedly lost by the exchange in the run-up to its insolvency.

Edelson said that he believes that other entities may be holding assets that belong to members of the class he represents, and that efforts are being made to determine the validity of this assertion, adding:

Edelson also made clear that former exchange users who have previously not exercised their rights through any of the associated class actions are still free to do so. For instance, he noted that an international creditors committee is being formed in an attempt to contact as many affected parties as possible.

US and Canada classes are still accepting former users who may wish to join, Edelson said, while existing class members will have the ability to opt out as they wish as more individual cases in the ongoing prosecution emerge.

Judge image via Shutterstock