Facing investigations by the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, San Jose-based Linqto, Inc. and three of its affiliated companies, including Linqto Texas, filed for Chapter 11 bankruptcy protection Monday in the Southern District of Texas, citing “potentially insurmountable operating challenges.”
According to court documents filed Monday in Houston, Linqto, which is a financial platform that enabled investment in private businesses, suspended operations in March after learning about “serious defects in the corporate formation, structure, and operation of the business that raise questions about what customers actually own.”
“Linqto cannot continue to operate under existing conditions without restructuring. The company faces potentially insurmountable operating challenges as a result of serious alleged securities law violations,” Linqto Chief Executive Dan Siciliano said in a written statement.
Linqto has hired a trio of law firms as its legal advisors for the bankruptcy, including Gabrielle Hamm and Athanasios E. Agelakopoulos at Schwartz Law, which has offices in Houston and Las Vegas; Sullivan & Cromwell to handle regulatory matters; and Greenberg Traurig to represent the company’s “general committee.”
The company also hired Jefferies as its investment banker and Triple P TRS and Breakpoint Partners as its restructuring advisors.
Petition states that Linqto has between 10,000 and 25,000 creditors with liabilities ranging from $500 million to $1 billion.
Linqto, in bankruptcy documents filed Monday, states that it has received a commitment for debtor-in-possession financing of up to $60 million from Sandton Capital Partners.
Some of its larger creditors include Sidley Austin ($345,992), the Dallas office of Deloitte & Touche ($194,431), Reed Smith ($162,923) and the New York law firm Lowenstein Sandler ($372,483).
The case has been assigned to Houston Bankruptcy Judge Alfredo Perez.
The case is In re Linqto, Inc., SDTX, No. 25-90817