Cyber Ninjas to File for Bankruptcy, CEO Plans to Start New Firm with Same Employees

Cyber Ninjas, the firm that attempted to review the results of the 2020 election, will file for bankruptcy and create a new firm in its stead.

Founder Doug Logan revealed the plan through text messages obtained by The Associated Press. He claims that he was initially unable to sell the firm due to "too much negativity around the name," and that bankruptcy would be the final option. By selling off all of Cyber Ninjas' assets, Logan claims that he will be able to pay off the debts needed to create a new company.

"If Cyber Ninjas goes out-of-business I either need to get a job with someone else," wrote Logan in an email to The Associated Press, "or start from scratch with a new company. The latter is the route I chose to go."

Cyber Ninjas was most notable for helping recount ballots in the Arizona county of Maricopa during the 2020 presidential election. The company's report of their findings certified that current President Joe Biden fairly won the election, but the machines used had some irregularities. Former President Donald Trump and his allies, who perpetuated false and unproven claims of election fraud, used this report to further their claims. Due to this and the heightened tensions between him and Arizona's Republican-majority Senate, he expressed uncertainty moving forward despite the new company on the horizon.

"I'm not naive enough to think for a second that the Senate has my back," he wrote. "The actions chosen through all of this speak quite a bit louder than the words, and make it clear the Senate has no intention of honoring what was committed to. The choice has been made to try what can legally be gotten away with rather than what is ethical or right."

Mr. Logan
A name placard for Doug Logan, Chief Executive Officer and Principal Consultant of Cyber Ninjas, Inc., sits on the table at a House Oversight Committee on Oversight and Reform hearing at the U.S. Capitol on October 7, 2021, in Washington, DC. Logan has decided to file Cyber Ninjas for bankruptcy. Photo by Bill Clark-Pool/Getty Images

His lawyer says Logan can't fulfill a court order to release public records because the company has no money, even though Trump allies raised millions of dollars for the unprecedented partisan election review.

Logan and Republican Senate President Karen Fann have been at odds over $100,000 of the $150,000 the Senate agreed to pay Cyber Ninjas, which has been withheld.

The text messages were sent from Logan to Fann on Monday and released to The Associated Press on Friday in response to a public records request. Chris Kleminich, the Senate's public records attorney, said Fann did not respond to Logan.

Logan told the AP his dispute with Fann stems from the outstanding $100,000 payment and the Senate's refusal to pay his legal fees in the public records dispute, which he believes is required under their contract.

"I have no intention of throwing you or anyone else under the bus, but I expect the time has also come for me to stop completely covering for decisions I didn't make," he continued to Fann.

Cyber Ninjas has been fighting two public records lawsuits filed by The Arizona Republic newspaper and the watchdog group American Oversight, arguing it is not subject to the public records law because it is a private company. Judges in both cases and the state Court of Appeals have disagreed.

Judge John Hannah of the Maricopa County Superior Court said Thursday he will fine Cyber Ninjas $50,000 a day starting Friday if it doesn't release public records. He warned that he'll extend the fines to "individuals who are responsible for compliance with this order," and not just the company, if necessary.

"The court is not going to accept the assertion that Cyber Ninjas is an empty shell and that no one is responsible for seeing that it complies," Hannah said.

Logan told the AP he plans to comply with the court order, but he wants more clarity from the judge and money from the Senate to cover costs, which he said the court is underestimating.

"When the rulings of the court are no longer ambiguous, and are within our capabilities to execute; it will happen," he said.

The Associated Press contributed to this report.

Cyber Ninjas 2020
Contractors working for Cyber Ninjas, who was hired by the Arizona State Senate, examine and recount ballots from the 2020 general election at Veterans Memorial Coliseum on May 1, 2021, in Phoenix, Arizona. Cyber Ninjas will file for bankruptcy, but will create a new company once its debts are paid off. Photo by Courtney Pedroza/Getty Images