BitGo, a California-based digital asset financial services company, posted a tweet confirming the $100-million lawsuit against Galaxy Digital for breaching its $1.2 billion-merger agreement.
The complaint was filed yesterday in the Delaware Chancery Court with Attorney Brian Timmons to provide ample time for Galaxy Digital to respond or cite critical information on the matter.
Details of the complaint will be disclosed to the public on September 15, Thursday.
So how did this BitGo–Galaxy Digital feud start?
The Mike Novogratz-founded Galaxy Digital has initially expressed its intention to acquire BitGo for $1.2 billion (a mix of stocks and cash) in 2021, with details of the acquisition still under negotiation.
However, things didn’t go smoothly and BitGo is now suing Galaxy Digital for allegedly abandoning the initial merger agreement.
In line with their “contractual right to terminate”, Galaxy Digital announced earlier that they are retracting from the acquisition deal in lieu of a lack of audited financial statement submitted for 2021. No termination will be collected in accordance with this termination.
Brian Timmons, Quinn Emanuel Law Firm partner, said that “BitGo has absolutely delivered the audits that were needed to get this deal done. Galaxy is the one with the problem and it’s saying: It’s not me, it’s you.”
Galaxy Digital: The Claims Don’t Have MeritGalaxy Digital is firm that BitGo’s claims don’t have enough merit. The deal was terminated in March while Galaxy Digital was waiting for a decision from the U.S. Securities and Exchange Commission regarding the company’s plans to regroup.
Apparently, Galaxy is sharing trades on the Toronto Stocks Exchange, with the intention to list on the Nasdaq.
Recently, Galaxy filed for a $554 million loss in Q2 adjacent to the crypto meltdown, which also led to the failed acquisition deal with the company.
On the other hand, despite the obvious company losses, Galaxy Digital is still bent on raising funds in order to close more deals.
Evidently, BitGo decided to extend the merger with Galaxy Digital until March only because of the breakup fee.
Other than that, BitGo will never really agree to extend more time. Evidently, BitGo had other potential partners who are interested to acquire the company.
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