Last Friday, shuttered custom PC maker Artesian Builds filed for Chapter 11 bankruptcy in California with over $3 million in liabilities on its balance sheet, including an estimated $1.37 million in unfulfilled orders. Its appointed restructuring officer is now seeking buyers for the company’s assets, which include an estimated $917,595 worth of inventory.
Artesian Builds collapsed dramatically earlier this year, suddenly shutting down its operations on March 8 and letting go around 50 employees in California and North Carolina. Artesian’s insolvency was apparently triggered by a wave of refunds following a controversial raffle livestreamed by the company’s CEO and owner Noah Katz, but two ex-employees who spoke to PC Gamer under the condition of anonymity said it was Katz’s long-term mismanagement that put the company in such a precarious position to begin with.
Another ex-employee had a more positive view of Katz and hoped the company would survive, but said that Katz was inexperienced as a CEO, and had admitted as much himself. All three ex-employees said that Katz had already been looking for new investors before the controversial livestream.
According to documents filed by Artesian, the company owes over $450,000 to two PC components distributors and holds over $200,000 in credit card debt. It also owes accrued paid time off to ex-employees (although former employees did get their final paychecks, according to the ones we spoke to), and lists an estimated $1.37 million in deferred revenue from unfulfilled orders which haven’t been refunded.
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In the now stripped-down Artesian Builds Discord server, a few customers have said they managed to get their money back by requesting chargebacks from their credit card companies. Thousands of others may be owed money, though, according to the bankruptcy filing. There are at least “hundreds” of gaming PC orders that were never shipped, said one ex-employee. Two customers who contacted PC Gamer say that their orders had already been delayed by months when the company shut down. One customer, whose son ordered a $5,000 PC in December last year, was told this February that orders placed last October were still being built.
Supply issues have genuinely been a problem for PC builders over the past few years, especially when it comes to GPUs. According to two of the ex-Artesian workers PC Gamer spoke to, however, another problem was that Katz was selling cryptocurrency mining systems, which further delayed gaming PC orders. Artesian was originally a mining rig supplier, but pivoted to gaming PCs in 2019, according to a report from Inverse. Apparently, it didn’t pivot completely. A 2021 profit and loss statement provided in the bankruptcy filing includes $395,000 in “Mining Business Revenue.”
Bankruptcy notices are being delivered now, and a creditor meeting is scheduled for May 16.
Chapter 11 bankruptcy allows a company to continue operating while paying its debts according to a plan negotiated with creditors. Artesian has been shuttered since early March, though, and the chief restructuring officer handling Artesian’s affairs indicated to PC Gamer that the company’s assets, including trade names, will be sold.