The Cake Group, Julian Hosp’s current project after he failed with TenX, is about to take a decisive turn. U-Zyn Chua, co-founder and Chief Technology Officer, has applied to the High Court in Singapore to wind up the company. This move marks a critical moment in the company’s history and raises questions about the future of DeFiChain.
Background to the winding-up petition
The winding-up petition, which was confirmed by Chua, lists the Cake Group as a defendant. This indicates that Chua has initiated proceedings for compulsory liquidation. A judge will now decide whether the application will be granted. The announcement of these court proceedings appeared in the classifieds section of The Straits Times.
The legal aspects of liquidation in Singapore
In Singapore, liquidation refers to a legal process in which a company’s assets are collected and sold to pay off its debts. Remaining assets are then distributed among the shareholders, after which the company ceases to exist. The procedure is used whenever there are differences between the owners and they cannot reach an agreement (deadlock).
The impact on the Cake Group and its subsidiaries
The Cake Group is the parent company of Bake, a crypto platform that recently announced layoffs. The layoffs affected 53 employees, about 30% of the workforce. This is also reflected in the company’s declining revenues and profits.
Ambiguities and reactions to the winding-up petition
The exact reason for the winding up petition remains unclear and Chua has declined to answer further questions. Julian Hosp, co-founder and CEO of Cake Group, first learned of the filing on Dec. 6 and is currently in discussions with lawyers to have the application dismissed. Hosp emphasized that the application does not indicate that Cake Group cannot pay its debts.
The internal dynamics and disagreements
According to Chua, there are growing differences between him and Hosp, particularly regarding cuts to the company’s engineering division. Chua claims that Hosp has “completely left him out” of these decisions. Employees of the company expressed surprise at the deterioration of the situation.
The legal basis of the application
The application is made under section 125(1)(i) of the Insolvency, Restructuring and Winding Up Act 2018. This section allows for winding up if the Court is of the opinion that it is just and equitable to do so.
The future of Cake Group and its business operations
Hosp assures that day-to-day operations will remain unaffected and the company will continue to operate at full capacity. The court will grant compulsory winding up petitions if there is a standstill in the management of the company.
The forthcoming hearing and its importance
A hearing for creditors or persons wishing to oppose the liquidation is scheduled for December 22. This hearing could be decisive for the future of Cake Group.
Conclusion: An uncertain future
Cake Group’s situation sheds light on the volatility and challenges in the cryptocurrency industry. While the future of the company is still uncertain, it is clear that this will definitely have far-reaching consequences for DeFiChain investors. Currently, the price of DFI has fallen to 0.22 US dollars (just under 10%). Julian Hosp posted a team photo (without U-Zyn) on Twitter today. However, it should not be forgotten that the remaining marketing and HR people are unlikely to be able to continue developing the project. The effects of the departure of U-Zyn and the engineers close to him are likely to be clearly felt in any case.
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