Jumio Gets Court Approval on Its Plan for Bankruptcy Estate

by San Antonio Attorney

Jumio Inc. has received approval from a bankruptcy court to liquidate its estate.  This is considered as a triumph for the firm’s original backers like Eduardo Saverin, co-founder of Facebook, who had dealt with accusations of manipulating Jumio’s bankruptcy to their benefit.

Jumio, a leading digital ID verification company that caters to Airbnb and United Airlines, sought for bankruptcy protection last March, one year after Saverin and Andreessen Horowitz have put in US$15.5 million in the company.

Saverin offered to buy the company but Centana Growth Partners eventually acquired Jumio for US$850,000.

JMO Wind Down Inc. is the new name of Jumio.  It is responsible for the repayment of debts.

The main focus of the winding down undertaking is a settlement attained earlier that was supported by Andreessen and Saverin, and a shareholders committee, according to reports.

The arrangement, which includes repayment, also sets up a trust that is going to allow shareholders to take legal action against former executives, including its founder and CEO, Daniel Mattes.

Saverin’s spokesman said the plan is going to help all of the company’s stake holders.  They will be able to file lawsuits for any discrepancies that instigated the bankruptcy, the statement said.  The spokesman also said creditors will receive payment and equity holders will have an option in pursuing payments.

The plan will provide ample protection for Andreessen and Saverin against potential lawsuits tied to the company’s bankruptcy, even though some stakeholders reserve the right to take legal action against Saverin and others.  There is already one pending lawsuit.

Bloso Investments filed a lawsuit against Saverin along with other executives alleging poor management of the company and deceiving shareholders regarding its potential success.  According to reports, court papers revealed that Mattes traded stocks in the secondary market that caused regulators to take notice.  Reports also say that the lawyers of Jumio blamed his actions, which include accounting irregularities, for causing new investments to vanish and ultimately the downfall of Jumio.

Mattes intends to appeal the ruling, claiming that Saverin and other previous executives mismanaged the company and designed its bankruptcy in such a way that they will not be sued.

 

Leave a Comment

Previous post:

Next post: