Solid, a cloud-based backend solution company, has filed for bankruptcy
Solid Financial Technologies Files for Chapter 11 Bankruptcy Protection
In a surprising turn of events, Solid Financial Technologies, a modern fintech infrastructure provider, filed for Chapter 11 bankruptcy protection and restructuring in a Delaware court last week.
The company, led by CEO Arjun Thyagarajan, has been embroiled in a series of challenges over the past year. Solid's former bank partner, Evolve Bank & Trust, has been hit with an enforcement action and lawsuits since Synapse's collapse. Synapse, another fintech, filed for bankruptcy in April 2024, with roughly $85 million in customer funds missing.
Solid's relationship with its partner bank, Lewis & Clark Bank, was also affected by allegations made by FTV Capital, an investor. FTV Capital's lawsuit claims that Solid's co-founders, Arjun Thyagarajan and Raghav Lal, deceived them regarding Solid's "revenues, customer churn, and business generally."
Despite these challenges, Solid aims to maintain normal business operations throughout the restructuring process. As of the bankruptcy filing date, Solid has roughly $760,000 in unsecured trade debt and roughly $7 million in cash on hand.
Solid decided to pursue Subchapter V of Chapter 11 bankruptcy because it offers shorter deadlines, greater flexibility, and does not require the payment of U.S. trustee quarterly fees. The company plans to cut down legal expenditures, sell its valuable assets, and create a Chapter 11 plan after a sale process.
It's important to note that no publicly available recent information or allegations involving Solid Financial Technologies and FTV Capital in their business dealings have been identified. There is no evidence from the search results that Solid Financial Technologies' Chapter 11 bankruptcy relates to disputes or allegations involving FTV Capital.
Solid has raised approximately $81 million in venture capital over three funding rounds. However, the company has faced significant and costly litigation, including a lawsuit from investor FTV Capital. Solid currently has three staff members and one independent contractor, compared to 23 employees in 2023.
The bankruptcy filing also includes information about Solid's wholly-owned subsidiary, Solid India, which is being wound down and is expected to cease operations by May 31.
As the restructuring process unfolds, Solid Financial Technologies will work towards reorganizing its operations and addressing the challenges it has faced. Stay tuned for more updates on this developing story.
The bankruptcy filing involving Solid Financial Technologies, a fintech company, also encompasses their wholly-owned subsidiary, Solid India, which is set to halt operations by May 31.
Despite raising substantial funds through venture capital in the past, Solid's fintech business has been mired in costly litigation, particularly with investor FTV Capital, impacting its operation and the industry at large.
