After less than two years in existence, Solavei is filing for bankruptcy

MVNO Solavei filed last week for Chapter 11 bankruptcy protection, but said it will continue to operate normally while it restructures. The company launched service in the fall of 2012. Solavei said that all of its services will continue uninterrupted and “member compensation” will be paid according to regular schedules. The company filed its voluntary bankruptcy protection petition in the U.S. Bankruptcy Court for the Western District of Washington because it wants to restructure its debt “in line with operating income and more accurately align costs and infrastructure needs.”

Solavei emerged on the scene two years ago with a high-profile list of investors,celebrity endorsers and an ambitious business model that relied on customers to spread the word about the company’s cellular phone service, earning cash along the way. From the beginning, Solavei’s multi-level marketing approach drew criticism, sparking hundreds of comments on GeekWire. Now, Solavei — which has flown under the radar for the several months — has hit some headwinds. The company today filed for Chapter 11 bankruptcy protection, restructuring its debt to be more “manageable with current operating income.” The filing lists more than 200 creditors, and liabilities in the range of $50 million to $100 million. One of those creditors, Cavallino Consulting of Sausalito, Calif. — is owed $7.5 million alone.