Great North Data has just $3.5 million in assets but owes creditors over $10 million
The firm, backed by federal and provincial government agencies, has liabilities of CA$13.2 million ($10 million) against assets of CA$4.6 million (3.49 million), CBC News reported Wednesday, citing bankruptcy documents filed late last month.
The Atlantic Canada Opportunities Agency (ACOA), responsible for helping to create opportunities for economic growth in the Atlantic Provinces, is owed CA$281,675. The ACOA reportedly provided CA$500,000 to Great North Data in late 2015. The agency is now "in contact with the client and are closely following all developments" regarding the bankruptcy.
The Newfoundland and Labrador government's Business Investment Corporation, on the other hand, is a secured creditor and is owed $313,718. That amount is secured by Great North Data's building, land, machinery and equipment, per the report.
Other unsecured creditors include Newfoundland and Labrador Hydro (CA$316,477) and the Business Development Bank of Canada (CA$225,000).
Firm's website is offline
Great North Data's website is currently offline, but an archived version shows that the firm was founded in 2013, and grew "from a basement startup to a major provider of processing capacity in Atlantic Canada."
An archived version of the website also shows a statement, dated June 26, 2018, saying that Canadian MP Yvonne Jean Jones visited one of Great North Data's centers and said the firm "invested over $9 million over the course of 5 years. $5-6 million of this total has been invested in contractors and equipment almost entirely hired and purchased from local sources in Labrador," adding:
"They currently employ 25 full-time and 4 part-time staff, and have intentions to grow this number with an additional 15-20 full time employees by December 2018. The company anticipates sales exceeding $6 million by the end of this year, which should only double throughout 2019."
While it is not clear why the firm went bankrupt, recent reports reveal that Great North Data faced complaints about its operations, such as electricity use, local job creation and why its operations make a loud noise.
In response, Great North Data CEO James Goodwin, said at the time:
“We are where we are, because that’s where the power is. The only other option is to shut down business."
In 2017, Bitcoin ASIC world's largest Bitmain sued Great North Data, and the case is still unsolved. Also, according to the documents filed during the case, Great North Data was in financial difficulty in 2016. Meanwhile, mining firm Bitfarms is still expanding its operations despite complaints of the residents of the city of Sherbrooke, Quebec.
Bitfarms reportedly manages five mining operations spread across the province to take advantage of cheap local hydropower.
Think we missed something? Let us know in the comments section below.