Topic: Putting Adults in Charge at Hashfast (Read 4134 times)

Hashfast is now in Chapter 11 - Hashfast files for Chapter 11 [coinfire.cf]

Hashfast is now in bankruptcy.

http://hashfast.org/14-30725.38.pdf

http://hashfast.org/14-30725.35.pdf

Moving forward there will be a lot of maneuvering and small players will have to be diligent.  We have spent a hefty amount of money out of pocket on lawyers fees in the interest of all those small players.  Moving forward we need to put in place a creditors council to make sure a fair resolution is made for everyone.  If you are owed refunds or equipment from Hashfast and want to support our efforts please send me contact information in a PM.

Hi, is it possible to join the suit? Can you send me some more info?

Thanks.

Good luck OP! It's about time someone got serious with these scammers!

Having been on both sides of law suits there are a few things to consider. The first of which is are there any liquid assets? The second is legal fees, who will pay. The third is obtaining a chapter 7 bankruptcy considering that the company may well argue that such action is not warranted. Also the company may file for Chapter 11 bankruptcy under which the company is protected from it's creditors. The company can also argue "Buyer's Remorse" and I feel sure they will have many other arguments.

Usually my attorney convinced me that while I had a good to excellent chance of winning I should consider the possibility of loosing and even if I win will the legal costs be greater than the recovered money. In all but one case I did not sue. I did win one suit but was never able to collect because there was no money to be payed with.

Note that there are already two federal lawsuits alleging fraud, along with five separate arbitration cases. See: Arstechnica post.

I'm not saying not to take legal action, I'm saying to go into this with your eyes-wide-open. Make sure you are not throwing good money after bad.

Disclaimer: I have no interest in the company in any manner.

If they do this after the bankruptcy filing, I believe it would have no impact on receivership.  They would still need to demonstrate that the company is solvent to continue operations.

There does not seem to be that much to it.  You are making an application to the court, so false statements would expose you to contempt and perjury charges, as well as liability from the debtor you are filing against.  That seems to be sufficient to keep everything honest, and there doesn't appear to be a lot of bureaucracy associated with the filing.

Once in receivership, the receiver has the duty to evaluate all claims against the debtor so you do need to prove such a debt exists, but that seems to be the extent of things.

EDIT: regarding your comments about process and stripping assets from the rightful holders.  The receiver follows that process during the bankruptcy.  If assets exceed liabilities they still belong to the owners of the company.  What you can't do is operate your company with other people's assets without their agreement.  By not paying refunds that are owed that is what Hashfast is doing today.

They won't ship if you requested a refund.
And they won't refund you if you didn't request a refund using something else than your lawyer in a period different than the 15 days allowed by the ToS.

(i actually don't really know the contractual conditions of batches different than the first 2, so the 15 days period thing could be wrong.)

I think you just answered your own question.  My guess as to what will happen is that once they have the list of people who are making claims they will prioritize shipment to those people first paying them off with now nearly worthless hardware and also use procedures to delay any court proceeding to the greatest extent possible in order to give them the maximum amount of time to ship and nullify as many individual claims as possible.

I guess this is what I am asking.  Will the court hearing this request take the time to basically vet each claimant (because not everyone is as honest as you  )?  Or will the standing be that you must have proven your case with litigation (being vetted at trial) to be considered a creditor.  They are asking a court to strip private citizens of a privately held corporation.  It think it's pretty clear one way or the other they are going to vet claimants, I always assumed litigation was required but if these guys have done there homework then my assumptions are incorrect.

I paid in USD.  Have wire transaction records, e-mails from Hashfast confirming receipt and that the order is okay, etc.  Can't imagine how they could DQ me.  The evidence is irrefutable.

Then again, if their shipping update posts are to be believed, they are on the verge of actually filling the remaining Batch 2 upgrade card orders, which would remove me from this action.... regrettable, since at this point seeing the bastards taken out is of more interest to me than the upgrade card.

Unless the suit will also be advancing Batch 1 MPP claims, in which case I'll happily stay in!

I assume since you mention that HF would likely use the strategy of DQing creditors that there is obviously a process for vetting actual creditors from people with other intentions, not your vetting process but the courts?  I always thought this move required one to have some kind of official creditor status like a judgement or something.  Basically a court vetted creditor in layman terms, otherwise isn't it still basically a "I say you owe me you say you don't scenario"?

If your angle is they need to be removed quickly to preserve the assets, doesn't that mean you need to preserve the assets while its under litigation?

I am curious how this can be done, can you share without giving to much away the procedural aspect of it?

Im interested, keep posting if u have news!

That's not necessarily bad, provided that the creditors who get paid don't keep quiet about it (i.e. no nondisclosure agreement!).  If Hashfast pays off people filing a suit like this, then the smaller guys band together and file suit themselves.  Several groups of smaller guys.  Recycle similar paperwork from case to case to keep the cost down. I would hope that we, the creditors, big and small could cooperate if that scenario unfolds.

We have no intention of suing.  Lawsuits in the United States only enrich the lawyers involved.  It is trivially easy to extend the resolution of any lawsuit by many years and the lawyers on both sides prefer that as it lines their pockets.

We are going to petition the court to place Hashfast into involuntary bankruptcy due to their failure to pay debts.  As the law requires multiple creditors to participate in the petition, this posting is to inform the community of the action and allow them to participate.  We anticipate Hashfast's strategy will be to attempt to disqualify creditors so we would like to file with an overwhelming number of creditors.

Dogie, after having sincerely tried to explain without any success for half of this thread why this is in no way a threat, if you don't mind, I won't reply trying to argue that yet another time.

There is nothing to listen to, you're going to sue a company but first you're going to tell us about it. I hope you get your money back, but I hope you actually do sue them rather than complaining and blowing smoke like so many do.

What exactly do you need as help, you've not made that clear in the OP. Put your accusations that I'm corrupt or bias in meta please, I'll see you there.

Go back to your (dare i say manipulative?) trustworthiness guide, dogie. You are not helping and you are obviously not interested into listening. Thank you.

No business or interest in Hashfast what so ever, just a commentator.

The court will appoint a receiver who will decide to either liquidate the company or bring in management to operate it as a going concern.  We will not be any more involved than any other creditor once Hashfast is placed into involuntary bankruptcy.  This is an ordinary process allowed to creditors of companies that fail to meet their obligations.  Literally centuries of law has been developed to make the process fair for everyone involved.

If refunds are paid, we would have no standing with the court to request bankruptcy.  To keep things fair I am offering others the chance to participate in this filing if they are in the similar situation to us of being unwilling to act as Hashfast's interest free bankers.

Good luck with it!

Interesting direction here is hoping that you can manage to pull this off. It would definitely put companies on notice if you can get this done.

The more creditors on the initial filing the better because the creditors are the stakeholders.   But yes, one downfall is that if they refund every single person on the filing, then the filing will be useless and the OP stated this and we would be out all the money that we have paid the law firm to research and prepare this.  Is that clear enough for you?   
Do you have an order or a refund request with Hashfast? 

So it's a threat, or it's not a threat. Makes little difference as far as I can tell.  Unless it's a bluff and they call it.  Unless it's a double bluff.

Look at the tense of the quote from the OP... it will be filed (we will do y...) unless you refund (unless you do x). This isn't rocket science :/

If this wasn't an open challenge/threat to HashFast and you were suing them regardless then there wouldn't need to be a forum post.

No your tense is incorrect.  It would be more like because YOU REFUSED TO DO X, the consequences are Y.  There is no "we will do unless...", it is already paid (and HF already knows the law firm that will be filing so this is not a surprise to them).   A threat would imply that a demand was JUST made.    Demand was made, and ignored (and re-made and ignored (MANY TIMES)).   This is the repercussion and the only solution.   While they could avoid and refund everyone, why would they after ignoring everyone in the past?   If they intended on conducting themselves in an ethical manner, they would have done that by now.  Honest people do not ignore their creditors for months after defaulting on their contracts, hiding behind an answering service.   Honest people pick up the phone and explain themselves and see if there is anything that can be done to rectify the situation.   Honest people do not hire people to harass customers that have legitimate complaints nor personally attack their customers in public (perhaps someone could put the link to the attacks HASHFAST CL posted against individuals who requested the refunds they were entitled to).    Let the court appoint someone and then we all will get the real facts and we can all decide for ourselves what happened at this company.   Considering I was told several times by several Hashfast employees that units would definitely start shipping in 10 days and then Edward received the chips 24 days later, I will be very interested in seeing the invoice and other paperwork from the foundry.

And the post is not addressed to HF at all.   It is addressed to the creditors who should know what options they have.   One order alone is over the threshold and we have 3 others that have documented claims, but we would prefer to file with more creditors already on board as it will make things simpler during the restructuring process.

This is not a game and it is time for people to realize there are consequences to bad behavior.   I believe that the more bad actors that are pushed out of bitcoin, the faster bitcoin will adopt and be accepted by people at large.

Again, how is it a threat? It's the consequence that the law imposes in similar conditions. It's in no way a threat. It's a simple description of the brighter future for HashCrap customers.

An edit because maybe it's not clear enough. The forced bankruptcy thing fails, by definition, if the debtor pays the creditor. This can happen after that the forced bankruptcy has been filled. HashCrap might decide not to pay anyone but to be ready to pay people forcing them into bankruptcy. That's the worst case scenario i was talking about before.

There was no sarcasm and it is a threat - do x or we will do y.

The problem is that you can't ask the court appointed guy to take time back. If we don't wait another 6 months we still have pretty good chances of getting everything back.

Interesting way of phrasing things but you are not correct in your sarcasm.

When you have demanded a refund and the company has not paid it, you are a creditor.
When creditors are not paid, they have remedies under US law.
When creditors force a company into chapter 11 or 7 bankruptcy (because the company has NOT repaid the creditors), the court appoints someone to run the company and clean up the mess.   This seems to be the part you do not understand.  That court appointed party goes in and figures out what is the BEST OUTCOME for everyone involved and tries to salvage as much as they can for the people who are stakeholders in the company.    Which includes TAKING back money/assets that had been wrongly distributed during the course of the business.

If you are truly interested, you can do a little research into the madoff case and just how far the appointed law firm went to get money back to FAIRLY divide up among the stakeholders.   Read a lot of articles because they went after everything.    Pretty solid law firm.

And it is not a "threat", the majority of the cost has already been paid to the law firm.

No, he opened this thread to collect claims from other customers. By going on alone you wouldn't have all of the benefits. Worst case scenario is HashCrap paying him forcing him to pay their legal fees. Best case scenario is HashCrap being run from the customers investigating their previous expenses and having even more proofs to use in a penal case against what will be the old management.

He is not even alone in what he is doing. It's an idea that many had since January and others are trying to implement since a few weeks.

(i've placed a poor, 5 BTC bounty for a successful forced bankruptcy and i would be incredibly happy to pay it)

I read it as, "follow the existing laws or we take your company".

So this is meant to be a threat to get a refund, give it us or we take your company?

Bravo!  Please keep us updated, and send the cause number when you have it.

Admiring initiative. I'm interested in how this turns out.

Excellent! Push it through!

No, it's only incredibly difficult.

We have lost patience with management at Hashfast.  As outside observers, it is impossible to separate incompetence from systematic fraud but it is clear that one or both is pervasive at the company.

We have waited patiently on a moderately large order (62 Sierras) while 6 months from our promised shipping date has gone past.  Over a month ago we cancelled our orders and demanded a refund as is our legal right. Not only has a refund not been forthcoming, no one at Hashfast bothers to respond to messages.  However when we inquired about purchasing another $1M in hardware, we had three emails and phone calls within an hour.

We have determined that a lawsuit is an ineffective approach at this point.  Instead we are going to apply to the court to have a receiver appointed to take control of the company.  By law, if 3 creditors, owed over $15k IN TOTAL apply to the court, the company can be placed under the control of a receiver.  The receiver will take control of the assets and debts of the company, determine if the operation can continue under new management or liquidate the assets as needed.   The receiver will also be obligated to find and report for prosecution any misuse of company funds that he finds.

Understandably this is a drastic move, but we believe it is our only option.  Hashfast has no right to operate using our money, and clearly they cannot operate without it or our refund would have been paid long ago.  If you would like to join us in this action, PM me.  All of the legal fees to move forward have already be paid.

Some people will not want Hashfast to be disrupted in this way, but we believe it is the only fair way to handle the situation.  Experience with MtGox and Bitfloor has shown that allowing an insolvent company to continue operating just results in additional losses for everyone (and often rewards insiders who cheat and steal from the rightful creditors).  By taking this action, all money flows from Hashfast will be reviewed and any fraudulent payments will have to be returned.  It will also stop boards that were paid for last year from being resold to scammers like Ken Slaughter rather than being delivered to their rightful owners.

We anticipate actual filings will be made next week.  Hashfast can easily prevent this by paying the refunds that are owed.