BitGo, a firm that provides institutional digital asset services, announced that it plans to seek legal action against Galaxy Digital for attempting to back out of its termination fee of $100 million after dropping its acquisition plans.
Back in May 2021, Mike Novogratz-owned investment and trading company Galaxy Digital said that it intended to acquire BitGo for $1.2 billion.
When BitGo asked Galaxy to extend the merger agreement in March 2022, the company claimed that Galaxy promised a $100 million reverse break fee.
However, as Galaxy brings up BitGo’s alleged failure to submit audited financial statements, Galaxy announced that it would terminate the agreement without paying any termination fee.
Quinn Emanuel’s partner R. Brian Timmons, who has been hired by BitGo for legal purposes, said Galaxy Digital’s attempt to put the blame for BitGo’s termination is “ludicrous.”
Timmons continued to say that BitGo thus far has honored its obligations, including the audited financials delivery.
“BitGo has honored its obligations thus far, including the delivery of its audited financials… Either Galaxy owes BitGo a $100 million termination fee as promised or it has been acting in bad faith and faces damages of that much or more.”
R. Brian Timmons
Timmons added that the termination of the deal may be related to Galaxy’s recent financial issues. The collapse of Terra’s ecosystem, which Novogratz was a major supporter of, contributed to the loss of $554 million in the second quarter of the year Galaxy had announced.
Galaxy said that it still continues to be committed to its plans of reorganization and upcoming Nasdaq listing. In May, the firm launched a share repurchase program.
