Last Friday, defunct custom PC maker Artesian Builds filed for Chapter 11 bankruptcy in California with more than $3 million in liabilities on its balance sheet, including $1.37 million in backorders. Its court-appointed restructuring officer is now looking for buyers for the company’s assets, which include an estimated $917,595 in inventory.
Artesian Builds collapsed dramatically in March of this year, suddenly ending operations on March 8 and laying off around 50 employees in California and North Carolina. Artesian’s insolvency was apparently triggered by a wave of refunds after controversial draw streamed live by the company’s CEO and owner Noah Katz, but two former employees who spoke to PC Gamer on condition of anonymity said it was Katz’s long-term mismanagement that put the company in such a precarious position to begin with. .
Another former employee had a more positive view of Katz and hoped the company would survive, but said Katz was inexperienced as a CEO and admitted as much. All three former employees said Katz was already looking for new investors before the controversial live stream.
According to Artesian’s financial documents included in the bankruptcy filing, the company’s debt includes more than $450,000 owed to two PC component distributors, more than $200,000 in credit card debt, a $1,200,000, paid time off for former employees (they paychecks, though) and $1.37 million in deferred income from backorders.
On the now-stripped Artesian Builds Discord server, some customers said they were able to get their money back by requesting chargebacks from their credit card companies, but the number of pending orders could be in the thousands. Two customers who contacted PC Gamer say their orders were already behind schedule for months when the company closed. A customer, whose son ordered a $5,000 PC in December of last year, was told in February of this year that October orders were still being placed.
Supply issues have genuinely been an issue for PC makers in recent years, especially when it comes to GPUs. According to two of the former Artesian workers that PC Gamer spoke to, however, another problem was that Katz was selling cryptocurrency mining systems, which further delayed orders for gaming PCs. Artesian was originally a mining rig supplier but switched to gaming PCs in 2019, according to inverse. Apparently, it didn’t turn completely. A 2021 profit and loss statement provided in the bankruptcy filing includes $395,000 in “Mining Business Income.”
Bankruptcy notices are now being delivered. A creditors meeting is scheduled for May 16, and the deadline for submitting proof of a claim is July 1.
A Chapter 11 bankruptcy filing allows a business to continue operating while paying its debts according to a plan negotiated with creditors. Artesian has been closed since early March, however, and the director of restructuring responsible for Artesian’s affairs has indicated to PC Gamer that the company’s assets, including trade names, will be sold.