Climate finance startup Aspiration Partners, now operating as CTN Holdings, has filed for Chapter 11 bankruptcy protection just weeks after its co-founder was arrested on federal fraud charges. The company, once celebrated for its high-profile backers and deals with major firms like Meta Platforms and Microsoft, is now seeking to sell off assets to repay an estimated $170 million in outstanding debt.
The bankruptcy filing, submitted on Sunday evening, includes CTN and several affiliated entities, such as Catona Climate Solutions. The firm plans to auction its assets within 45 days and has secured $4 million in debtor-in-possession financing to sustain operations during the insolvency proceedings.
Chief Restructuring Officer Miles Staglik, of CR3 Partners, said in court filings that the company’s complex ventures and narrow field of potential buyers mean creditors may face a long wait before any returns are realised. “Realising value will require substantial investment and patience,” he noted.
The collapse comes in the wake of criminal charges brought against CTN’s co-founder, Joseph Sanberg, who is accused by U.S. federal prosecutors of defrauding two investment funds of at least $145 million. The U.S. Department of Justice has clarified that the allegations relate solely to Sanberg’s personal conduct and do not implicate CTN or its affiliates in any wrongdoing.
Staglik emphasised that current company leadership and staff had no knowledge of Sanberg’s alleged actions and are considered victims of the situation. “Mr Sanberg no longer holds any position or role within the company,” he confirmed. However, the scandal has had a chilling effect on CTN’s ability to attract new funding, complicating efforts to stabilise the business and pursue a sale.
Among CTN’s largest unsecured creditors is the Los Angeles Clippers basketball team and the Kia Forum, both owned by billionaire and former Microsoft CEO Steve Ballmer. According to court documents, the entities are owed around $40 million related to “contracted carbon credits” and associated value.
Aspiration had previously attracted investment from a number of prominent figures in entertainment and business, positioning itself as a pioneer in sustainability-focused finance. Its offerings included carbon credit arrangements for some of the world’s largest corporations.
Sanberg, through his attorney Marc Mukasey, has pleaded not guilty and intends to “vigorously defend” himself against the charges.
The bankruptcy marks a dramatic fall for a company once hailed as a leader in the green finance space, and raises wider questions about oversight and governance in the rapidly growing voluntary carbon market.
