Prime Trust, once one of the most successful Fintechs in its sector, has filed for Chapter 11 Bankruptcy protection as it seeks to maximize the value of the firm.
According to a corporate release, Prime Trust and certain affiliates have filed voluntarily in the Eighth Judicial District Court of the State of Nevada.
Prime Trust has selected John Guedry as receiver for the company and, along with Guedry, John Wilcox, and Michael Wyse are now the sole members of a special restructuring committee and will oversee operations during the proceedings as it enters a debtor in possession status.
Prime Trust said intends to file a number of motions with the Court designed to facilitate the company’s orderly evaluation of all strategic alternatives, including potentially a sale of the company’s assets and operations as a going concern. The company said it will request to continue to pay wages and provide benefits to ongoing employees as usual.
Rumors hit Prime Trust this past June when chatter indicated that the company was in trouble. At one point, competitor BitGo indicated an interest in acquiring the firm, but the deal collapsed.
In late June, the State of Nevada Department of Business and Industry, Financial Institutions Division (NFID) announced that Prime Trust had negative equity of over $12 million and the company’s financial condition had “deteriorated to a critically deficient level.” The financial shortfall imperiled the firm as it struggled to stay afloat.
In the early days of the company’s existence, Prime Trust was a top provider of services for securities crowdfunding providers, dominating the industry. Eventually, Prime Trust entered into the digital asset sector, deciding at one point to exit its legacy operations, a move that may have hastened its demise as crypto markets retreated.
