Decentralized cloud storage provider Storj Labs filed for Chapter 11 bankruptcy protection on Sunday in the US Bankruptcy Court for the Northern District of West Virginia. The company intends to keep its network and customer services running under court oversight while restructuring substantial legacy liabilities and examining a path for STORJ tokenholders to obtain equity in the reorganized entity. Parent company Inveniam will continue to back the business.

The liabilities largely originated before the firm’s current strategy and exceed what organic growth can resolve. Network operations remain normal and the token’s utility is unchanged. STORJ traded near 0.072 dollars with no material price movement after the announcement.

Management plans to propose a mechanism that would let tokenholders share in the equity of the reorganized company. Eligibility criteria, any snapshot or lockup requirements and the size of any allocation have not been detailed. Any such arrangement must comply with bankruptcy priority rules and receive court approval.

Storj began in 2014 as an open-source peer-to-peer storage project designed to allow users to rent capacity from other participants rather than centralized providers. The filing occurs in a month that has already seen Movement Labs and Bitcoin mining pool Poolin enter Chapter 11 proceedings.