The American mining company Giga Watt could not cope with the changing environment and market conditions, finally declaring for bankruptcy this week. The firm still owes millions to creditors, and its overall condition is severely compromised.
Giga Watt filed for Chapter 11 bankruptcy on Monday, at an Eastern District of Washington court. According to documents that specialized site Coindesk had access to, the company still has to pay, and pay big: it owes almost $7 million to its largest 20 unsecured creditors.
Besides having to deal with bankruptcy and everything it carries with it, Giga Watt is also facing eviction in the Douglas County. According to several reports, the county’s port has launched the eviction process. Giga Watt owes lots of money, roughly $310,000, to utilities providers in the area, and Neppel Electric, an electricity company, is owed nearly $500,000.
“The Company is insolvent and unable to Pay Debts when Due”
The future outlook of Giga Watt is bleak at best, with its liabilities being estimated between $10 million and $50 million, and assets worth only $50,000, the court documents read.
After a shareholders’ meeting held on November 18th, it was determined that there was no point on pursuing any other option or path other than filing for bankruptcy. “The corporation is insolvent and unable to pay its debts when due. Giga Watt and its creditors would best be served by reorganization of the corporation under Chapter 11 of the Bankruptcy Code.”
Andrey Kuzenny arranged the meeting. He is the owner of more than 10 percent of the mining company. However, the firm was actually founded by Dave Carlson, a Bitcoin miner whose initial objective was to pave the way for small scale miners, thanks to the creation and development of the customized mining “pods,” along with a cheap electricity supply in a Washington area.
Giga Watt actually had a promising 2017, organizing an Initial Coin Offering (ICO) in the month of May, raising something in the neighborhood of $22 million worth of crypto assets at that moment. The ICO was made to let investors acquire stakes of the firm’s services.
Everything went south very quickly, though. In January 2018, Giga Watt was accused of conducting unregistered securities offerings. The plaintiffs wanted the firm to return their investments because Giga Watt did not meet construction deadlines and, after that, dishonored their promises to provide the respective refunds to investors.
George Turner, who acts as Giga Watt’s managing Director, stated that the filing did not pass through his office, and that the piece of news came as a surprise. He had advocated the Chapter 11 “many months ago,” according to his own words and quoted by the Washington-located iFiberOne site.
Carlson, which was a Microsoft software engineer many years ago, formed Giga Watt back in 2012. The May 2017 ICO was held even though Carlson said at the time that Giga Watt “did not need” to register with the SEC, which is the United States’ Securities and Exchange Commission.
By Andres Chavez