Crypto Mining Company Giga Watt Files For Bankruptcybr>
Crypto mining company Giga Watt has filed for bankruptcy, claiming that the firm is “insolvent and unable to pay its debts when due.”
Founded by bitcoin miner Dave Carlson, Giga Watt provides turnkey mining service along with high-density distributed computing in areas like Washington and Wenatchee. It is known for its full range of mining service, which includes private blockchain servicing, equipment sales, and maintenance.
On Monday, Giga Watt filed for Chapter 11 protection in the Eastern District of Washington bankruptcy court. According to the court documents, the company is holding between zero to $50,000 worth of assets and liabilities between $10 million to $50 million. Creditors include electricity provider Neppel Electric, which the firm owes $460,658, Talos Construction of Chelan ($355,3440), the Douglas County PUD ($310,329), Schmitt Electric of Wenatchee ($57,160), and Wenatchee law firm Jeffers Danielson Sonn and Aylward ($36,760).
The filing comes as Giga Watt fends off a crash in crypto market values and two lawsuits alleging wire fraud and impropriety in its “initial coin offering (ICO) in May 2017,” which raised $22.3 million.
“The corporation is insolvent and unable to pay its debts when due,” according to the minutes of a special meeting of the shareholders of Giga Watt. “The corporation and its creditors would best be served by reorganization of the corporation under Chapter 11 of the Bankruptcy Code.”
George Turner, managing director of Giga Watts, said that the filing was made by the company’s board of directors and didn’t pass through his office. Turner added that he was advocating Chapter 11 “many months ago,” and this news came to him “as a surprise.”
Chapter 11 is generally filed by corporations that require time to restructure their debts, and it gives the debtor a fresh start, subject to the debtor’s fulfillment of his obligations under the plan of reorganization. These plans may include downsizing of business operations to reduce expenses, as well as renegotiating debts. In some cases, plans involve liquidating all assets to repay creditors. If the plan is feasible and fair, the courts accept it, and the process moves forward. The plan must also be in the best interest of the creditors. If the debtor does not suggest a plan, the creditors may propose one instead.