Creditors of publicly traded Mawson Infrastructure Group ($MIGI) filed an involuntary petition for the company to enter Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware, court documents dated on December 4 reveal.
Through their respective trustees, the petitioning creditors – W Capital Advisors Fund, The Mountainview Trust, and Marshal Investments MIG Trust – are collectively seeking a $13.78 million claim through the bankruptcy proceedings.
Creditors may file an involuntary petition for Chapter 11 proceedings against a debtor to kickstart the bankruptcy process if they believe the creditor is defaulting on its debt. Mawson has 21 days to file a motion or answer to the petition, and they may challenge it in court.
In a press release following the news, Mawson said that it “has not yet been formally served with an involuntary petition; however, if served, the Company’s Board of Directors intend to vigorously defend the Company against such a filing to the full extent of the law. Mawson expects to continue to operate as usual and execute its business plan accordingly.”
According to Mawson’s Q3 2024 financials, the company has $59.19 million in current liabilities, the bulk of which includes $36.27 million in trade and other payables and $21.37 million in debt.
Related to its debts, Mawson’s filing reveals that, as of September 30, 2024, it had borrowed $1.35 million from W Capital Advisors at a rate of 12% per year. W Capital Advisors is an Australian company, which Mawson claims was placed into Australian voluntary administration, a legal process for restructuring financially distressed companies. Additionally, as of September 30, 2024, Mawson had an outstanding loan balance of $10.53 million with Marshall Investments, with an interest rate of 12% per year.
As of 2:40pm EST on December 4, Mawson shares fell 57% to $0.81 in response to the news.
This is a developing story and we will update it when new information surfaces.
