Yahoo Finance Riot Blockchain Sues Northern Data Over Disclosures Related to Texas Bitcoin Mine Acquisition
Bitcoin miner Riot Blockchain (RIOT) is suing hosting firm Northern Data (NB2X:GER), alleging breach of contract and failure to disclose important information.
The lawsuit relates to the Texas Whinstone bitcoin mine, slated to be one of the world's largest by power capacity, which Riot acquired from Northern Data just last year for $651 million – $80 million cash and 11.8 million shares of Riot stock.
In the lawsuit filed on Sept. 7 in a Delaware court, Riot claims that Germany's Northern Data failed to disclose $84 million in liabilities to a third party, which the third party asked for in April of this year. At the time, Riot was trying to negotiate the final closing price for the acquisition but Northern Data "delayed and obfuscated," the lawsuit claims. Riot also says that Northern Data continues to stall negotiations and has delayed paying almost $114 million it owes to Riot.
"Northern Data rejects the claims made and management does not expect this matter to distract Northern Data from its overall business strategy," said Jens-Philipp Briemle, head of investor relations at the German firm.
Briemle added that the lawsuit is only seeking to "submit certain claims to an independent accountant for resolution" and is not seeking $114 million in damages.
The Whinstone mine is entangled in a separate legal battle with one of its hosting clients, Japanese GMO Internet.
UPDATE (Sept. 22, 09:20 UTC): Adds response from Northern Data in fourth and fifth paragraph.
