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MegaUpload founder given access to cash

By | Published on Thursday 30 August 2012

Kim Schmitz

New Zealand’s High Court has green lighted a proposal to provide MegaUpload and its founder Kim ‘Dotcom’ Schmitz with access to cash to cover ongoing legal expenses, and to help Dotcom meet the rent payments on his million dollar a year rented mansion.

As much previously reported, assets held by the controversial file-transfer website and its founder were frozen in January, when the US authorities shut down the MegaUpload servers and, at the request of the Americans, police in New Zealand arrested four executives linked to the Hong Kong incorporated digital company. The US is currently trying to extradite those executives to face charges of copyright infringement, money laundering and racketeering.

The lack of funds to pay rapidly mounting legal fees has been a bugbear of Dotcom and his team since day one, and they have been pushing the New Zealand courts to release monies, arguing that without access to cash the defence is at a significant disadvantage. And on Wednesday, despite opposition from US and New Zealand prosecutors, the country’s High Court conceded, by allowing Team Mega to take out a NZ$6 million loan secured against frozen assets. Dotcom himself will also be allowed to sell some of his infamous fleet of cars.

The MegaUpload team had asked for $8 million, of which $2.7 million would go on past legal fees, $2.5 million on future legal costs, and $2 million would be used to pay past and future rent bills (Dotcom having taken out a loan to make a February rent payment, and then negotiated a postponement on the next rent bill).

Although the original plan was for the US’s extradition case to be heard in August, that won’t now take place until next March. However, an ongoing squabble over the warrant used to raid Dotcom’s mansion in January, and what should happen to assets seized given the wrong warrant was seemingly used, should return to court next month, with the prosecution looking to overturn a previous court ruling in the defence’s favour on that issue.

Dotcom, meanwhile, is investing much of his energies into trying to get the Megabox direct-to-fan platform, that he had been developing before the January shutdown, up and running, while routinely telling the world via Twitter how he and his future Mega ventures will single-handedly empower artists, and change the entertainment industry, and possibly the world, forever. Even though his own musical offerings arguably remind us why the A&R filtering process of the old school record industry isn’t always a bad thing.