Colorado Man Files Lawsuit Against Crypto Mining Firm, CEO Over Unpaid Loans Totaling $471,999

News | March 27, 2024 By:

On Wednesday, March 13, 2024, Trent Reynolds filed an amended complaint against Wes Hamilton and Biofuel Mining, Inc. in the United States District Court for the District of Colorado.

According to the complaint, this case arises from a series of loan transactions that took place in 2022 involving Covala Capital, a Colorado-based limited liability company. Covala had planned to make investments in Biofuel Mining, a Kentucky-based cryptocurrency mining corporation owned by Hamilton, including loans and the potential purchase of shares in the company.

In February 2022, Hamilton personally obtained a $100,000 loan from Covala, documented by a promissory note. It’s alleged that Hamilton transferred these funds directly to Biofuel Mining. Subsequently, Covala borrowed additional funds from other investors and wired over $322,000 in payments directly to Biofuel Mining’s bank account. Covala also paid $49,999 to Biofuel Mining to purchase Bitcoin mining machines on its behalf.

However, the planned partnership between Covala and Biofuel Mining was never finalized. Covala founder Ronald Southard passed away in June 2022 without having purchased an ownership stake in Biofuel Mining.

Through a January 2023 agreement, Covala transferred its rights and claims relating to the loans and mining machines to Reynolds Capital, a trust owned by Trent Reynolds. This included the promissory note with Hamilton and the right to recover funds paid to Biofuel Mining. Reynolds satisfied all debts owed by Covala to its investors as well.

The lawsuit filed by Reynolds accuses Hamilton of breaching his contract by failing to repay the $100,000 loan. It argues that Biofuel Mining has been unjustly enriched by the over $422,000 in payments from Covala and calls for the disgorgement of these funds. The suit also claims Biofuel Mining breached an agreement regarding the Bitcoin mining machines and owes $49,999 plus interest. Reynolds is seeking a total damages award of over $471,999 from the defendants.

Please contact BlockTribune for access to a copy of this filing.