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The Singapore High Court has dismissed an application from Cake Group CTO and co-founder, U-Zyn Chua, to wind up the company.
Judicial Commissioner Alex Wong said on Thursday that it was inappropriate for Chua to seek liquidation and there were no grounds for shutting down the firm.
Chua initiated the process to wind up the company on 1 December 2023. The move came after Cake co-founder and CEO Julian Hosp disclosed that the company would reduce its workforce by 30%.
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Wong clarified that his order did not reflect an endorsement of Hosp's behaviour outlined in Chua's claim, urging the co-founders to resolve the conflict carefully.
Chua argued that he was trapped and liquidation was the only solution. Wong said he was unconvinced that Chua exhausted other forms of exit and that he could sell his shares on the open market.
The former CTO said selling his shares would be tough as no buyer would want to be a minority shareholder but Wong refuted the claim.
Chua also cited his soured relationship with Hosp and the co-founder's "poor reputation" as a reason for the market to not want his shares. Wong rebutted that it was Chua who reached out to Hosp in 2019 to work together.
Hosp has since taken to social media to celebrate the result. "Today is a happy day for the Cake Group, our customers, and our talented team," he posted on LinkedIn.
"This afternoon, the judge dismissed the winding up application against my Company Cake Group. He noted, among other things, that Cake Group was a thriving enterprise of value. With this decision, the uncertainty for customers, team members and partners ends today. In the meantime, it’s back to building. Onwards and upwards."
Meanwhile, Chua revealed he is consulting his lawyers for the next steps, stating "we are back at square one."
"After mutually agreeing that our trust & working relationship has broken down and that both of us were to part ways since September 2023, we have failed to effectively do so 6 months in," he said on LinkedIn. "After Julian's last offer to sell in February 2024, I have both offered to buy his shares, and offered my shares for him to buy, at exactly the same asking price. Both were declined."
In February, Hosp offered Chua an opportunity to buy over Cake Group. "In a surprise turn of events, 1 business day before the court hearing yesterday, Julian Hosp made an offer for me to buy over the entirety of his wife and his Cake Group shares, thereby allowing them both to exit Cake Group," Chua tweeted.
"Even though the offer came outside of the usual document submission window for court proceedings, I am putting in serious consideration in taking up the offer by Julian."
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The same month, Hosp and Chua reached a settlement with early investors John Rost and Howard Fineman. Rost's and Fineman's outstanding DFI has been converted to DUSD and then burned to "show full support to the DeFiChain community."
Bake clarified that Rost and Fineman have not been involved in Bake since April 2021.
In a separate public statement addressed to Hosp and shared by Hosp, Rost expressed regret for comments made towards Hosp, his wife and Chua. "In the heat of the moment, I made certain negative statements about the Cake Group, DeFiChain and its community, Mr U-Zyn Chua, Dr Julian Hosp and his wife Mrs Bettina Hosp," Rost said.
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