Layer1 CEO alleges co-founder is using majority power to ‘ransack’ company – CryptoNewsTo

Layer1 CEO alleges co-founder is using majority power to ‘ransack’ company

The CEO of crypto miner Layer1 Technologies has filed a lawsuit against the firm’s two other board members — including co-founder Jakov Dolic — for allegedly commandeering Layer1’s operations for their own gain. 

Chief executive John Harney and DGF Investments Inc — a British Virgin Islands-based investment firm — filed the lawsuit against Dolic and fellow board member Tobias Ebel in Delaware’s Chancery Court on Feb. 2.

The lawsuit alleges that both Dolic and Ebel used a power vacuum at Layer1’s equity parent Enigma to seize control of the Bitcoin mining company and operate it as their “own personal fiefdom.”

Harney and DGF Investments Inc — which owns a majority stake in Enigma — claim the defendants have “usurped the authority” of Layer1’s CEO and prevented Harney from “responsibly operating Layer1.”

One of the accusations made against Dolic and Ebel alleges they executed “large unauthorized transactions” that were not recorded in Layer1’s financial reporting and that they use Layer1’s operations to mine Bitcoin (BTC) and keep the revenue for themselves:

“Dolic and his loyalists” have “wielded their majority board control to ransack Layer1, operating it for their own benefit and engaging in self-dealing transactions with impunity.”

The plaintiffs also claimed that Dolic continues to press the false narrative that he owns 77% of Layer1’s equity. In the filing, the plaintiffs argued that Dolic sold all of his Layer1 stock to Enigma for $16 million on Jan. 24, 2022.

Harney and DGF Investments’ court filing in the Delaware court. Source. Bloomberg Law.

Harney and DGF have stressed that without imminent judicial intervention to confirm that Enigma has 100% ownership of Layer1, there is nothing that can stop Dolic and Ebel from “operating” the company “for their own benefit.”

Related: Argo Blockchain accused of misleading investors in class-action lawsuit

The latest lawsuit filed against Dolic and Ebel alleges a breach of fiduciary duty, pursuant to section 226 of the Delaware General Corporation Law.

The Plaintiffs are hoping to seek relief from the court via an injunction, have their fees paid for by the defendants and order an appointed custodian to run the company.

Layer1 Technologies was the first United States-based Bitcoin mining company to have fully integrated renewable energy into its operations, according to a 2020 report.

Cointelegraph reached out to Dolic for comment but did not receive an immediate response.