BurstNET, a web hosting provider that has been recently accused of avoiding paying debts, has had its assets and client contracts bought by an entity known as DigiPLUS which is headed by BurstNET CEO JW Ray.
Ray became CEO of BurstNET in January 2014, and is referred to as CEO of DigiPLUS, according to the official Tuesday announcement. Ray is also the managing member of cloud industry venture capital fund Backlog Capital, and was once COO of Learn.com, which he co-founded.
Other DigiPLUS executives include finance VP Brandon Dorsey and operations VP Arthur Cote who are also Backlog Capital executives.
Ray said in a statement, “Assuming the assets of BurstNet illustrates our commitment to providing a broader product portfolio, new technology and applications expertise to better serve BurstNET clients.”
The Tuesday announcement from BurstNet stated that DigiPLUS relocated one of its three Scranton, Pa., data centers to Charlotte, N.C.
Ray states, “Although moving a data center presents challenges in the short term, we will now be able to offer the capacity for growth and peace of mind of a world-class infrastructure. We are working 24/7 to minimize any disruptions in service.”
In March, BurstNET informed customers that their equipment would be moving from Dunmore, Pa., to a North Carolina data center where energy is cheaper and customers could benefit from more reliability, connectivity, and redundancy. This move also entailed price increases for customers.
Court documents filed in early February revealed that BurstNET’s equipment financiers had filed a lawsuit in a Pennsylvania court against the company for failing to make more than $200,000 in payments. There is also evidence that BurstNET’s landlords issued a complaint that BurstNet hadn’t made lease payments on the industrial space where their data center was located.
There has been much speculation on VPS Boards and other industry forums that the move had to do with avoiding creditors, an allegation BurstNET president and CEO JW Ray said is “complete speculation” and he refused to comment.