Court Orders Audit of ConsenSys AG – Trustnodes

There’s an internal battle going on within ConsenSys, ethereum’s biggest development studio, concerning the transfer of the Zug based ConsenSys AG assets to the Delaware incorporated ConsenSys Software Inc.

“Even the Federal Tax Administration (FTA) apparently could not readily comprehend the appropriateness of the set purchase price of USD 46.6 million on the basis of the PwC valuation report,” the court said.

The transfer of the ConsenSys AG assets, which includes MetaMask, Infura and numerous other entities, allowed ConsenSys Software to raise about $715 million from JP Morgan and others.

Numerous employees however were offered equity in ConsenSys AG, which without the assets is worthless. They therefore have now taken the matter to court.

“This ruling in favour of an audit will enable us to gather the evidence we need to succeed in that challenge. This will see all the transferred assets returned to ConsenSys AG where they will have appropriate stewardship,” said Arthur Falls, a shareholder in ConsenSys AG and an ex-employee.

A previous court ruling last month ordered a shareholder vote on the matter, making this another win for the challenging shareholders that have about 11% of ConsenSys AG.

“Regardless of the outcome of the vote, we will be able to challenge the legality of the transaction in court, where Joe Lubin does not have the advantage of being majority shareholder,” Falls says.

ConsenSys did not respond in time for publishing, but the company recently announced it was laying off 96 employees, “which represents 11% of ConsenSys’ total workforce.”

The bear market was given as the reason for this decision, but the court ruling might be of potentially longer term consequences.