Invenia Technical Computing’s legal disputes follow it into bankruptcy filing

Artificial intelligence was not yet a ubiquitous concept when Invenia Technical Computing Corp. was formed in the mid 2000s.

The Winnipeg startup might have been too esoteric to be considered a likely unicorn candidate, despite its brilliant young CEO — Matthew Hudson was 23 when Invenia was founded in 2006 — and the growing stable of PhDs in its employ.

But after reportedly hitting $1 billion in valuation this decade, controversy struck in late 2022. The company has been mired in a tangled legal dispute among its founders, investors and employees ever since, leading to its board assigning the company into bankruptcy earlier this year.

That has not quelled the controversy regarding governance of the company, including whether the board that placed it into bankruptcy was actually its true board of directors.

Invenia’s business model was to train its machine-learning AI program to use public domain data to generate algorithms to make investments in the next-day electricity future markets.

Those markets are organized around seven large independent system operators across the U.S. and Canada that include the electricity generating and transmission infrastructures in each jurisdiction.

In addition to generating increasing revenue — reportedly more than $200 million in 2022 — through traditional arbitrage trading, the company was also effectively helping the electrical infrastructure become more efficient. For instance, signalling fossil fuel generating stations to power down if next-day demand was down.

By all accounts, the company was scaling up apace, with a couple of rounds of venture capital investments and a valuation reportedly approaching $1 billion.

Hudson was let go at the end of 2022; the company’s staff of about 75 people in Winnipeg and Cambridge, England, were laid off in early 2023.

Meanwhile, governance of the corporate entity continued to be in a dispute. Board meetings were scheduled and cancelled at the last minute. Court filings indicate financial statements were withheld from employees and shareholders.

Prior to the bankruptcy filing in late January, a confrontational shareholder meeting that month called into question the legality of the board.

Stakeholders petitioned the Ontario Superior Court, disputing whether the board had the authority to place the company into bankruptcy and whether it had an obligation to notify the court and shareholders bankruptcy was imminent.

An Ontario judge later ruled the disputed board can remain in place as the “status quo board,” was within its rights to place the company into bankruptcy and there was “no requirement for Invenia or its counsel to disclose its planned assignment into bankruptcy at the Jan. 24, 2025 scheduling conference.”

“In light of the stage at where we are at and the contentious nature of these proceedings, the trustee has no comment for the media at this time,” said Jason Kanji, a vice-president with Grant Thornton Ltd., Invenia’s bankruptcy trustee.

Court documents show the company has $39,436.72 in assets and $1,880,584.12 in liabilities.

martin.cash@freepress.mb.ca