Co-founders Layer1 Technologies suing each other by dividing company
2023.02.07 01:47
Co-founders Layer1 Technologies suing each other by dividing company
By Tiffany Smith
Budrigannews.com – Layer1 Technologies’ CEO has filed a lawsuit against the company’s two other board members, including co-founder Jakov Dolic, for allegedly taking control of the company’s operations for personal gain.
On February 2, the lawsuit against Dolic and fellow board member Tobias Ebel was filed in Delaware’s Chancery Court by DGF Investments Inc., an investment firm based in the British Virgin Islands.
Dolic and Ebel, according to the lawsuit, used a power vacuum at Layer1’s equity parent Enigma to take control of the Bitcoin mining company and run it as their “own personal fiefdom,” the suit claims.
Enigma’s majority owners, Harney and DGF Investments Inc., assert that the defendants have prevented Harney from “responsibly operating Layer1” and “usurped the authority” of Layer1’s CEO.
One of the allegations leveled against Dolic and Ebel states that they used Layer1’s operations to mine Bitcoin (BTC) and keep the revenue for themselves, and that they carried out “large unauthorized transactions” that were not recorded in Layer1’s financial reporting.
“Dolic and his acolytes” have “wielded their majority board control to ransack Layer1, operating it for their own benefit and engaging in self-dealing transactions with impunity,” according to the company’s website.
Additionally, the plaintiffs alleged that Dolic maintains the erroneous belief that he controls 77% of Layer1’s equity. The plaintiffs argued in the filing that on January 24, 2022, Dolic sold all of his Layer1 stock to Enigma for $16 million.
Harney and DGF Investments’ court filing in the Delaware court
Harney and DGF have made it clear that Dolic and Ebel will continue to “operate” Layer1 “for their own benefit” unless a court steps in to confirm Enigma’s 100 percent ownership of the company.
According to section 226 of the Delaware General Corporation Law, a breach of fiduciary duty is the basis for the most recent lawsuit brought against Dolic and Ebel.
The Plaintiffs hope to obtain an injunction, have their legal fees covered by the defendants, and have an appointed custodian run the business.
According to a 2020 report, Layer1 Technologies was the first Bitcoin mining company based in the United States to fully incorporate renewable energy into its operations.
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