The CEO of cryptocurrency mining firm Layer1 Technologies has filed a lawsuit against two of its board members.
This hostile takeover has caused significant disruption to the company's operations and has put the future of Layer1 at risk.
The lawsuit seeks to restore the rightful control of Layer1 to its CEO and to ensure that the company's operations are not misused for the benefit of any individual.
Layer1 Technologies' CEO has sued the company's two other board members. Ths includes co-founder Jakov Dolic, for taking over Layer1's operations for their own gain.
Layer1 CEO John Harney and DGF Investments Inc, a British Virgin Islands-based investment firm, sued Dolic and fellow board member Tobias Ebel in Delaware Chancery Court on February 2.
According to the lawsuit, Dolic and Ebel took advantage of a void in authority at Layer1's equity parent Enigma to assume control of the Bitcoin mining business and run it as their "own personal fiefdom."
Plaintiffs are accused of "usurping the power" of Layer1's CEO and preventing Harney from "responsibly operating Layer1,". This is according to Harney and DGF Investments Inc., which owns a majority share in Enigma.
One of the charges against Dolic and Ebel is that they carried out "massive unlawful transactions" that were not included in Layer1's financial reporting. Apart from that, they made advantage of Layer1's activities to mine Bitcoin (BTC) and retain the profits for themselves.
"Dolic and his loyalists" have "used their majority board power to ransack Layer1, operating it for their own gain, and participating in self-dealing transactions with impunity."
Dolic, according to the plaintiffs, "continues to push the misleading notion that he holds 77% of Layer1's stock," they added. Plaintiffs claimed that Dolic sold all of his Layer1 stock to Enigma on January 24, 2022, for a price of $16 million.
There is nothing that can stop Dolic and Ebel from "running" the company "for their own benefit”. As Harney and DGF have emphasized, absence of immediate judicial action to clarify that Enigma has 100% ownership of Layer1.
As per section 226 of the Delaware General Corporation Law, the most recent legal action brought against Dolic and Ebel claims a breach of fiduciary duty.
In addition to having the defendants pay their legal fees, the plaintiffs want the court to appoint a custodian to administer the business. He is also willing to grant them an injunction to request remedy from the defendants.
A 2020 report states that Layer1 Technologies was the first Bitcoin mining business with US operations to fully integrate renewable energy into its operations.
Dolic did not immediately respond when Cointelegraph asked him for a comment.
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