An ongoing dispute between the two partners who hold equal shares in multi-cryptocurrency mining company Coinmint has resulted in one of the partners filing to dissolve the company. Coinmint claims to be the largest digital currency data centre in the world with the company operating in the former Alcoa aluminium smelting plant in Massena, New York.
One of two partners of multi-cryptocurrency mining company Coinmint, LLC has filed to dissolve the company over a dispute with the other partner. The petition to dissolve Coinmint was filed by Mintvest Capital Ltd. (Partner 1) with the respondent in the case being CoinMint Living Trust (Partner 2). Each partner owns a 50% stake in the company with no other shareholders.
Founded in 2016, Coinmint claims to operate North America’s largest digital currency data centre. Coinmint leases the former Alcoa aluminium smelting plant in Massena, New York, with a marketed energy capacity of 435 MW.
“Deadlock Regarding the Direction of the Company”
The dissolution petition submitted to a Delaware court claims that Partner 2 took “action to the detriment of the company”. Specifically, the document notes that the dispute is over Partner 2 converting the legal jurisdiction of Coinmint to Puerto Rico without the approval of Partner 1. Partner 2 formed a Puerto Rican entity in January 2018 with Ashton Soniat registered as the agent of the entity.
The dissolution document details that Partner 1 has proposed to sell Coinmint to a private equity firm and split the proceeds according to the equal ownership. However, such propositions have failed to progress.
Furthermore, the dissolution petition notes that private equity firms have shown interest in purchasing Coinmint with three offers since August 2019. The document further details that the value of Coinmint has declined 40% since August 2019.
MinerUpdate speculates that the balance sheet of Coinmint holds valuable assets but may be declining in value due to the mining rigs on the balance sheet. With the Coinmint operation mining several altcoins, the value of altcoin ASIC hardware may have declined given the sharp depreciation in altcoin prices observed in 2019.
Furthermore, as the halving approaches, older-generation Bitcoin mining rigs that may be held by Coinmint are also likely declining in value. However, analysing the Coinmint website would suggest that a lease to the Massena plant and attractive power agreements are among the valuable assets on the Coinmint balance sheet.
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The dispute has escalated recently with the dissolution document noting that Partner 2 has taken action to remove the designated manager of Partner 1, Prieur Leary, from his role. However, Leary remains the appointed manager of Partner 1 as only the partner which designated a manager can remove them. Furthermore, the document notes that Coinmint will become insolvent if the company does not secure financing or a sale.
This is not the first time CoinMint has brushed with controversy. Coinmint was sued by a New York real estate company in 2019 for allegedly breaching contract terms by failing to pay rent and building an electrical transformer in the rented commercial space.
The legal case is currently pending. Both parties are awaiting a decision from the Delaware court.