Latest news with #SapienGroup
Bloomberg
17-07-2025
- Business
- Bloomberg
Shareholders of Failed Fintech Want Bankruptcy Moved to Delaware
Shareholders of collapsed fintech startup Linqto Inc. asked a federal judge in Texas to send the company's bankruptcy case to Delaware, contending there they will be better protected from the whims of new managers. Investment firm Sapien Group said in a court filing Wednesday that shareholders want to challenge actions taken by Linqto's board after a new chief executive was hired to replace founder Bill Sarris.
Associated Press
16-07-2025
- Business
- Associated Press
Linqto Shareholder, Sapien Group, Files Explosive Motion to Transfer Linqto's Bankruptcy Cases from Texas to Delaware
HOUSTON, July 16, 2025 (GLOBE NEWSWIRE) -- Major Linqto shareholder, Sapien Group, has filed a motion to transfer the venue of Linqto, Inc.'s jointly-administered Chapter 11 cases from Texas to Delaware (Case No. 25-90186). The motion follows the bankruptcy filing by Linqto in Texas on July 7 and asserts multiple grounds for the change in venue, including that the action was taken without shareholder knowledge or consent. 'Transfer is warranted because the Debtors lack any meaningful relationship whatsoever with this District, entrenched management having created the Texas Debtor as a new Texas limited liability company only three short months before filing for bankruptcy,' the filing states, adding, 'The Texas Debtor was formed furtively, without the knowledge of, approval of, or even a scintilla of notice to the Parent Debtor's shareholders.' Evidence suggests Linqto Chief Executive Officer F. Daniel Siciliano filed preemptively — knowing that a decisive majority of shareholders were poised to replace the board — in a jurisdiction where Linqto was not legally eligible to file based on the surreptitious creation of the Texas entity. The motion contends that the true operating Debtors — the Parent Debtor and the related operating Debtors — are all formed, exist, and operate under the internal laws of the State of Delaware. The motion further asserts that the filing of the Cases in Texas appears to be a quintessential example of improper forum shopping, with the newly formed Texas Debtor being created for the apparent purpose of manufacturing and manipulating venue. The filing further challenges the legal legitimacy of Linqto's current board, contending that Mr. Siciliano was never lawfully elected to the unsanctioned board and that key director seats were unlawfully 'switched' to consolidate power — actions that run contrary to their fiduciary duties under Delaware law. The motion also claims the board repeatedly ignored and manipulated corporate governance rules, committing violations such as not holding proper Board meetings, making inconsistent representations to shareholders, and amending company bylaws for purposes of evading shareholder approval. These allegations are supported by a Declaration of Victor Jiang, Sapien Group's founder and a former Linqto board member, which accuses Linqto's alleged board and management of 'numerous breaches of fiduciary duties, breaches of the duty of loyalty, and securities law violations,' contending that the current bankruptcy filings are 'part of a well-orchestrated scheme' designed to steal or redirect the shareholder's equity without consent. The motion suggests that the requisite number of shareholder votes exist to remove the unsanctioned Board and appoint a new Board, but the Chapter 11 case was filed to thwart that vote. Of particular concern are four motions set for hearing on August 5, 2025, one of which seeks a fairly rapid determination from the Court that the proceeds of the various securities are property of the Debtors, not the customers. With over 15,000 impacted customers across 130 countries, the motion underscores the global significance of these proceedings — and the need for fairness, transparency, and the rule of law in the proper venue: Delaware. Reference: Case No. 25-90186 PDFs available: For media inquiries contact [email protected]. CONTACT: [email protected]
Mint
09-07-2025
- Business
- Mint
Shareholders of Private Market Startup Vow to Fight Bankruptcy
Shareholders of collapsed fintech startup Linqto vowed to fight an effort by its new management to reorganize the troubled company in bankruptcy. Managers who took over in recent months put Linqto under court protection in Houston this week, claiming former executives mismanaged the firm's business for years by misleading customers into believing they owned shares in 111, privately-held companies worth more than $500 million. Shareholder Sapien Group, an Australia-based investment firm, said it has the backing of 52% of shareholders for its campaign to challenge current managers in bankruptcy. Sapien has hired bankruptcy lawyers for advice on whether to try to dismiss the Chapter 11 petition, or take other action, according to the letter. 'Our objectives remain the same: preserving the value of Linqto as a going concern and operating business; and protecting the value of the shareholders' investments,' Sapien said in the letter. It was unclear which shareholders are part of the Sapien-led effort. A representative of Linqto declined to comment on the letter. Linqto told its 13,600 customers that they could buy stakes in private companies before the firms went public, something that's typically available only to big institutions, company bankruptcy attorney Samuel A. Schwartz told the judge overseeing the insolvency case on Tuesday. That turned out to be wrong, Schwartz said. The 'securities couldn't be transferred just directly to customers, that would be a violation of securities law,' he said, referring to the shares customers thought they were acquiring. 'Also, the securities themselves have contractual transfer limitations.' The startup, which started offering private investments in 2020, was part of a wave of financial firms that claimed to make private markets more accessible. Its offerings — which included crypto startup Ripple and AI company CoreWeave — drew in individuals attracted to the allure of private markets. The US Securities and Exchange Commission is investigating Linqto and whether its former managers failed to verify if some of its customers were accredited investors with sufficient financial backing to invest through the company, according to court documents. A Linqto affiliate is the actual owner of the 111 securities, Schwartz said. The company's customers are unsecured creditors, he said. Linqto's advisers plan to use the bankruptcy process to raise money to repay customers and other creditors, he said. The company will try to negotiate a bankruptcy payout plan with regulators before presenting a detailed proposal to creditors for a vote, Schwartz said. 'We think we have significant resources to make distributions to customers,' he told US Bankruptcy Judge Alfredo R. Perez. The company in early 2024 began searching for a new CEO to replace company founder Bill Sarris. After a months-long search, it hired Francis Daniel Siciliano as its new CEO, who learned just before he started the new job that Linqto faced probes by the SEC and the Financial Industry Regulatory Authority. Siciliano began an internal investigation that eventually forced out many original executives, according to court records. Linqto has lined up a $60 million loan from Sandton Capital Partners to fund its Chapter 11 bankruptcy. The company said it needs the loan because it's been generating relatively little cash since it suspended its operations in March. To stay afloat, the company is selling securities 'to sophisticated purchasers' that are in compliance with applicable state and federal laws, Stein said. The case is Linqto Texas, LLC, 25-90186, US Bankruptcy Court, Southern District of Texas, Houston. This article was generated from an automated news agency feed without modifications to text.
