Southern Huskies made the shock annoucement on Friday to immediately quit the New Zealand NBL.
"We believe our relationship with Basketball Tasmania is untenable and after investing over $1.7 million in the Tasmanian basketball market since 2017, we have made the difficult decision to remove ourselves," Huskies chief operating officer Mike Sutton said in a statement.
"We have enjoyed our time in Tasmania and believe we have had a positive impact in a short period of time.
"We're proud to have provided significant investment to keep the pathway program running for NBL1 after the previous [Chargers] incumbent went into administration and to have completed a very difficult first season across all three of our teams.
"We believe there's a lot to be proud of in what we have achieved since the start of this journey, but circumstances over the past month have made it impossible to remain a part of the basketball program in Tasmania."
The Huskies will present an exit report explaining the circumstances behind the decision to Premier Will Hodgman months after the state government handed out a $200,000 operations grant.
The defunct club plans to make arrangements for remaining creditors to be paid.
The Huskies' demise is the second time inside a year a team exited over issues involving Basketball Tasmania.
Basketball Tasmania chief executive Chris McCoy has assured that Hobart will not be without an NBL1 side that could adopt the Chargers name or even invite the ex-club's stakeholders to renegotiate a new deal to sign up.
"The timing was at least right to make a decision one way or another," McCoy said.
"It allows us what we need to ensure we have two teams on the floor in Hobart."
McCoy was not surprised with the Huskies' withdrawal that came without warning.
But he could not highlight the reason behind the rookie side not being able to deal with Basketball Tasmania.
"We worked really well through a partnership for 12 months, so I would not agree with the comment," he said.
"One of our roles is to protect the integrity of the sport and to ask the difficult questions. By the Huskies' admission, there were shortcomings in year one and we are quite within our right to ask those areas will be improved in year two. If that's untenable, that's disappointing."
The news comes after the Auckland-based Super City Rangers were axed for failing to meet financial obligations.
"While we know there is a lot unfolding in Tasmania with regards to the possible arrival of the NBL, it is unfortunate our league seems to have been caught in the crossfire," Nelson said.