U.S.-based digital asset services firm BitGo said it has filed a lawsuit in the Delaware Chancery Court against Michael Novogratz's Galaxy Digital Ventures seeking damages of more than $100 million arising from Galaxy's improper repudiation and intentional breach of its merger agreement with BitGo.
In May 2021, Galaxy Digital had agreed to acquire BitGo in a cash and stock deal valued at about $1.2 billion.
In mid-August 2022, Galaxy Digital exercised its right to terminate its acquisition agreement following BitGo's failure to deliver, by July 31, 2022, audited financial statements for 2021 that comply with the requirements of the agreement. Galaxy had then said no termination fee is payable in connection with the termination.
Galaxy had said it intends to complete the proposed reorganization and domestication to become a Delaware-based company, and subsequently list on the Nasdaq, upon completion of the SEC's review and subject to stock exchange approval of such listing.
While commenting on the termination, BitGo said it intends to hold Galaxy Digital legally responsible for its improper decision to terminate the merger agreement, which was not scheduled to expire until December 31, 2022, at the earliest. BitGo said it has hired litigation powerhouse Quinn Emanuel to take appropriate legal action.
BitGo stated that it is public knowledge that Galaxy reported a $550 million loss this past quarter, that its stock is performing poorly, and that both Galaxy and Novogratz have been distracted by the Luna fiasco.
BitGo added that either Galaxy owes BitGo a $100 million termination fee as promised or it has been acting in bad faith and faces damages of that much or more.
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