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Jumio, an identity-verification startup we first covered way back in 2011, has agreed to sell the majority of its assets to a new company set up by backer and Facebook cofounder Eduardo Saverin as part of a bankruptcy procedure.

Jumio launched initially in October 2011 as a way for retailers to verify ID and accept credit cards through waving them in front of a webcam, later made to work through apps and a smartphone camera. The company has expanded its computer visions smarts since then to include the likes of face-detection technology too. The technology is about reducing friction to signing up new customers and ensuring a checkout can be processed without issues.

The Palo Alto, California-based company has raised almost $40 million since its inception, and has been backed by Saverin from early on. Indeed, in the company’s announcement for its first $6.5 million investment back in 2011, Saverin said: “I’m usually a critical person, but the last time I have seen such a disruptive idea was actually Facebook.”

Saverin met Mark Zuckerberg while studying at Harvard, and the duo — alongside other cofounders Chris Hughes, Dustin Moskovitz, and Andrew McCollum — worked on the launch of “The Facebook” in 2004. Saverin controversially renounced his U.S. citizenship in 2012 ahead of the Facebook IPO and now lives in Singapore, though he claimed at the time the decision had nothing to do with saving money on taxes.

At any rate, Saverin’s remaining stake in Facebook means he’s not short of cash, but he has now set up a new company called Jumio Acquisition, LLC, which as its name suggests has been established as the holding company for the Jumio assets he intends to buy. In addition to this new holding company, Saverin also retains his own personal stock in the company.

In terms of how Jumio got to where it currently is, well, the story isn’t entirely clear. However, a report surfaced last year that Jumio had replaced founder and CEO Daniel Mattes with Stephen Stuut, who previously headed up TruePosition. This came “following an internal investigation into possible financial irregularities,” according to Fortune. Very little has been added to this from anyone involved, including Jumio’s high-ranking investors Andreessen Horowitz, Citi Ventures, and Pinnacle Ventures.

The press release from Jumio certainly suggests something awry has been going on behind the scenes, which has led to Jumio filing for bankruptcy in the U.S.:

Certain legacy issues combined with related government investigations and proceedings have made it difficult for Jumio to secure necessary funding for its operations. As a result, Jumio intends to implement the sale as an asset sale under Section 363 of the U.S. Bankruptcy Code.

To that end, Jumio’s U.S. business has commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware to facilitate the process. This action is expected to allow the company to provide for an orderly sale of its assets in a court-supervised environment. The company’s subsidiaries located outside the U.S. are not included in the court filings but are included in the sale. Jumio expects all of its operations to continue without disruption during the sale process. Customers and employees should see no interruption as a result of this process.

So Jumio as we know it — in the U.S. at least — is being made bankrupt, and the core business is being spun out into a new entity. And it’s fairly confident that this will be a seamless process, one that its customers (including United Airlines and Airbnb) won’t even notice.

“Jumio created the online ID verification industry, and we are thriving from an operational standpoint as we continue to see robust bookings and build strong relationships with some of the most recognizable brands and companies in the world,” said Jumio CEO Stuut in the press release. “After thoroughly evaluating all available options, we determined that an asset sale is in the best interests of Jumio and our stakeholders. We expect this process to be seamless for our customers with no disruption to our operations. Despite some of the challenges Jumio’s leadership team inherited, our underlying business remains exceptionally strong. The court-supervised sale and restructuring process will allow us to strengthen the Company’s financial structure and extend our leadership position in ID verification.”

The press release states that the sale is still “subject to other bids that may be received,” meaning that Jumio Acquisition, LLC is effectively a so-called stalking horse bidder to establish interest in the startup from other suitors — a legal obligation. Alongside the main news, Jumio Acquisition and other “affiliates” have promised $3.7 million in “debtor-in-possession” financing to see the company through the transition. If Jumio Acquisition’s offer wins out, it says it will make employment offers to Jumio’s existing team.

“The fair and orderly process announced today will allow Jumio’s new management and its employees to continue to serve its top-tier customers and to realize the company’s potential,” added Saverin. “With the company’s future operations in good hands, Jumio Acquisition is pleased to make this stalking horse bid to facilitate an orderly transition to a promising future for Jumio.”

So Jumio has been unable to secure new financing because of an undisclosed irregularity behind the scenes, and it sounds like this led Saverin to call in his debt, which Jumio has been unable to fulfil. Saverin is now trying to take control of the company, and is going through the necessary legal processes to achieve this. But that is just guesswork — VentureBeat has reached out to Jumio Acquisition and others involved, and will update here when or if we hear back.

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