The American mining firm Giga Watt has declared bankruptcy and owes millions of dollars to creditors.
The firm filed for bankruptcy under Chapter 11 of the US Bankruptcy Law in a court in the Eastern District of Washington on Monday. In the documents, the company indicated that it still owes its largest 20 unsecured creditors almost $ 7 million.
The firm’s creditors include a utility company in Douglas County, Colorado, where one of the mining farms is located, Giga Watt owes it $ 310,000, as well as the electricity supplier Neppel Electric, which owes nearly half a million dollars.
According to court documents, Giga Watt has assets of less than $ 50,000, while the firm’s estimated debt is $ 10–50 million.
“The corporation is not creditworthy and cannot pay its debts on time”, says the resolution of the special Giga Watt shareholders meeting, which took place on November 18“. The corporation and its creditors will best solve the problem by reorganizing the corporation in accordance with Chapter 11 of the Bankruptcy Law”.
The meeting was convened by Andrew Kusenny, who owns more than 10% of the mining company.
Giga Watt was founded by the once widely known community miner Dave Carlson to open the industry to small miners by creating customized modules with low-cost and stable power supply, as well as round-the-clock service at a facility in central Washington.
As part of a plan that allows investors to buy a share in the company's services, in May 2017, an initial token allocation (ICO) was conducted, with which the company managed to collect cryptocurrency in the amount of $ 22 million at the exchange rate at that time.
However, in January of this year, a group of plaintiffs sued the Giga Watt for conducting an unregistered placement of securities. The plaintiffs sought to return their investments, because the company did not comply with the construction deadlines, and, they claim, did not fulfill promises to return the investments.