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Builder.ai collapsed owing money to an Israeli private intelligence outfit, a high-profile crisis communications specialist and one of the world’s most feared litigation law firms, the London tech group’s US bankruptcy filings have revealed.
The Microsoft-backed start-up’s main US holding company filed for bankruptcy in Delaware on Monday, revealing unpaid bills and debts to a range of creditors, from key customers to big tech companies such as Amazon and Microsoft.
The creditor list also included: Tel Aviv-based private intelligence firm Shibumi Strategy; top US litigation law firm Quinn Emanuel; and Sitrick Group, a Los Angeles-based public relations firm specialising in so-called “crisis communications”.
All three firms were hired after the Financial Times reported last year that Builder.ai’s co-founders, including its chief executive Sachin Dev Duggal, were embroiled in criminal investigations in India, according to people with direct knowledge of the matter.
The FT also reported on a series of other legal disputes that Duggal, Builder.ai’s self-proclaimed “chief wizard”, has faced during his career.
Duggal has denied wrongdoing in relation to these matters and his lawyers have previously maintained that he is just a witness in the Indian case.
Builder.ai collapsed last month after an internal investigation found evidence of potentially bogus sales, with revenues reported under Duggal’s watch restated to just a quarter of previous estimates. At the time, Builder.ai declined to comment, adding that it was “focused on the orderly wind down and preserving value for employees”.
Quinn Emanuel sent a letter to the FT last year on behalf of Builder.ai and Duggal, alleging potential breaches of confidence in the course of the paper’s reporting on the tech company’s customer relations.
The US litigation specialist is one of the go-to firms for large corporations and prominent individuals embroiled in legal disputes. Its partners’ business cards and emails often carry the strapline: “The most feared law firm in the world”.
Mike Sitrick, the founder of his eponymous public relations firm Sitrick and Company, also contacted the FT last year on behalf of Builder.ai, raising concerns around the newspaper’s reporting process. He is a widely sought after crisis communications specialist.
Shibumi was founded by Israeli corporate espionage specialists Ori Gur-Ari and Saphia Fenton, the latter of which previously worked for Israeli intelligence agency Mossad. Shibumi has touted its use of former spies drawn from the country’s intelligence services to solve thorny problems for ultra-rich clients.
Shibumi was also involved in a high-profile spying scandal in 2022, when the Financial Times revealed that the controversial financier Lars Windhorst had employed the Israeli firm to target a German football boss.
While Windhorst and Shibumi both initially denied knowledge of the alleged smear campaign at Hertha Berlin, an internal investigation at the club later found that invoices for the campaign were paid from a bank account “attributed to” Windhorst.
The German financier told the FT in an interview last year that he “had a legitimate reason to ask professionals to help me investigate” Hertha Berlin’s former chair Werner Gegenbauer, but said that he “regretted” what had happened.
Builder.ai’s US holding company filed for Chapter 7 bankruptcy protection in Delaware on Monday, a process that will allow it to formally liquidate its assets after telling employees last month that it would file for insolvency.
US bankruptcy court is famously transparent, and the company revealed that it had more than 200 creditors. Builder.ai listed liabilities of as much as $100mn and assets of less than $10mn, according to court filings.
The bankruptcy filings also list T&M USA, an American corporate intelligence firm, as a creditor. T&M’s website states that it assists “clients in overcoming legal, reputational, and business challenges to emerge safer and more resilient”.
A senior former Builder.ai employee said that “working with international professional advisers is perfectly normal practice for a successful billion dollar technology company operating in multiple jurisdictions”.
Duggal, Quinn Emanuel and Sitrick declined to comment. Reached by phone, Gur-Ari did not comment. He did not respond to a follow up request for comment on email. Builder.ai, Fenton and T&M did not immediately respond to requests for comment.
https://www.ft.com/content/ef37280d-2fe5-4512-8455-dc8724fd1521
