TabaPay, a leader in the financial technology sector, has recently pulled back from its initial plan to take over the financially struggling company, Synapse. This move is largely due to complications with a significant banking partner, thus putting Synapse’s economic future into question.
Previously considered a financial lifeline for Synapse, the acquisition’s collapse could lead to major repercussions for the company which is already in dire financial straits. This divergence has sparked tensions within the organization and created a cloud of uncertainty over Synapse’s potential future.
Synapse’s troubled relationship with Evolve Bank & Trust emerges as another key issue. Synapse has pointed fingers at Evolve accusing them of causing their economic woes, a claim that the bank vehemently disputes.
Tensions escalated when TabaPay issued a termination notice for the acquisition deal, highlighting significant unmet conditions. This in turn ignited a fiery exchange of allegations between Synapse and Evolve, adding fuel to an already existing conflict.
During a bankruptcy court hearing, Synapse declared that the deal with TabaPay had reached a deadlock.
TabaPay rescinds Synapse acquisition plan
This marked a crucial turning point in the tumultuous relationship between the two parties, propelling the dispute into uncharted territory.
Sankaet Pathak, TabaPay’s CEO and co-founder Lynda J. Grant put the blame squarely on Evolve, accusing them of failing to meet their For Benefit of Others (FBO) obligations. Evolve, on the other hand, stated it had fulfilled all contractual responsibilities concerning the proposed deal.
Adding to its troubles, Synapse was recently removed as an intermediary between Evolve and Mercury. This lead to an overdraft of $49.6 million for Synapse and a lawsuit filed by Mercury against it. Following this, Synapse’s financial stability took a nosedive, disrupting its other partnerships who started questioning the integrity of the firm.
Investors have also started to back away, concerned about the uncertainty surrounding the company and the lawsuit. Synapse has formulated a plan to repay the overdraft, but the lingering effects of these actions have already delivered a blow to the company’s reputation.
