The chapter 11 bankruptcy for Tempe-based electric scooter company Phat Rides Inc. proved to be short-lived, the Phoenix Business Journal reported. U.S. Bankruptcy Court Judge Paul Sala on Sept. 14 dismissed the bankruptcy case that had been filed two weeks earlier by deposed former CEO Tim Moran, ruling that he "did not have the proper legal authority to execute PRI's voluntary petition under applicable law," according to Sala's order. A power struggle over ownership of the company had been waged since late July, with Moran attempting to maintain control even after Phat Rides defaulted in May on a multimillion-dollar loan from its biggest investor — leading the investor to take control of the company. Sala ruled that an effort by Moran in late August to reappoint himself as sole director of the company was improper because he didn't convene the company's shareholders before doing so. As a result, Judge Sala found that investor Merchant Banking Income Fund LLC (MBIF) maintained control of Phat Rides. When MBIF took control a month prior, it had named its principal, Jeremy Hill, as sole director of Phat Rides. “I don’t know what percentage MBIF owns of this company. I don’t know what percentage Mr. Moran owns of this company. But I know, based on the undisputed facts, that MBIF owns some percentage," Judge Sala said. “This debtor had no authority to file the bankruptcy, and that’s how I’ll rule.”
