According to CoinDesk, Banq, which filed for bankruptcy last year, had its application rejected by a U.S. judge who believed that the application was intended to protect the company and its executives from lawsuits by creditors. Banq and its chairman Jon Jiles are being sued by creditor N9, accusing Jiles of failing to fulfill his fiduciary duties. Banq's application for Chapter 11 bankruptcy in the Nevada Bankruptcy Court was rejected. Judge Natalie M. Cox called the application a "bad faith" strategy designed to gain an advantage in pending litigation rather than reorganize the business. Cox wrote in the ruling that this bankruptcy proceeding is to protect Banq and its founder Jiles from N9's investor lawsuits. N9 owns $3 million in Banq shares and accuses Jiles of prioritizing the interests of Prime Trust rather than Banq. N9's lawsuit also accuses Jiles of not signing a non-compete agreement with former Banq CEO Scott Purcell, but only between Purcell and Prime Trust. Banq is suing Purcell, accusing him of shifting the company's focus from crypto payments to NFTs and transferring $17.5 million in assets and technology to Fortress NFT Group, a competitor he founded. Cox wrote in his ruling that Banq's bankruptcy plan is not a legitimate business reorganization because the company has no source of income and its business is almost entirely related to the lawsuit against Purcell. Cox pointed out that Jiles funded the bankruptcy proceedings through a $225,000 loan from his company NVF LLC. Cox wrote that the case is intended to hinder N9 from pursuing Jiles for breach of fiduciary duty.