As the legacy of Bitwise Industries got stripped away in Fresno, dozens of the company’s creditors met, discussing the future of the bankrupt company’s assets.
The Bitwise sign atop the South Stadium building in downtown Fresno— a symbol of bringing the tech industry to underdog areas — was painted over last weekend.
“We’ve started the process of branding the buildings, but we’re excited to see whose name may be going up on the building next,” said landlord Will Dyck, president of Baltara Enterprises LP.
Dyck said the South Stadium name will be replaced as well, but he hadn’t come up with it yet.
Brief Bankruptcy Meeting
Thursday morning, more than 75 creditors met virtually over the phone through the U.S. Bankruptcy Court in Wilmington, Delaware. Normally, the creditors would ask questions of the debtors (Bitwise), but the latter no-showed.
Bitwise filed for bankruptcy on June 28, a month after GV Wire first reported about the company’s financial troubles.
The meeting was short, as several Central Valley creditors banded together and filed a motion to transfer the court hearings from Delaware to Fresno. That caused an official delay to the creditors meeting, which will be rescheduled after the transfer motion is heard.
The motion also requests to change the trustee (the federal administrator) of the case from Delaware-based Jeoffrey Burtch to Fresno-based James Salven.
“The trustee and my firm have been working really hard over the past five weeks to understand why the company failed to identify and secure the assets of these businesses,” said attorney Mark Felger, representing Burtch.
He said the trustee’s goal is to “maximize the ultimate recovery for their creditors.”
Transferring to Fresno?
Known in court records as “The Ad Hoc Committee,” the group’s motion will be heard Aug. 23 in Delaware. The committee is comprised of Bitwise creditors (and the amount owed):
- Agri Capital, Inc. ($1.12 million);
- CA AG, LLC ($560,000);
- Rodger Glaspey ($1.15 million);
- Eric Hanson, M.D. ($600,000);
- Amendola Investments ($3.6 million);
- and Kimberly R. Hudson Revocable Trust ($720,000).
“California is a more convenient forum. California is also convenient for the members of the Ad Hoc Committee, which have business offices located in and around Fresno, as well as ‘some 900 workers,’ ” the motion said.
The motion notes that Bitwise’s former headquarters is “a short walk” to the Fresno federal courthouse.
About the 401(k) Accounts
“We just ask that everyone be patient while this important work is done to make sure that every participant is treated in a fair and equitable way.” — Attorney Mark Felger on 401(k) recovery
During the reports of Bitwise’s financial collapse, several employees accused the company of taking money out of their paychecks but never depositing them into 401(k) retirement accounts.
Felger says the bankruptcy court hired an employment benefits firm to look into the matter.
“Audits will need to be done. Tax returns will need to be filed. But we’re hopeful that this work will be accomplished and completed over the next 60 to 90 days or so, and participants will be able to access and move their funds hopefully … before year-end,” Felger said. “And we just ask that everyone be patient while this important work is done to make sure that every participant is treated in a fair and equitable way.”
Felger said he did not want a situation where the only participants recovering money are those who make the requests first. He expects a delay because of the motion to transfer.
When asked why the delay, Felger said trustees prefer to use their own counsel, and the current 401(k) lawyer is in Delaware, not California.
Hardship Fund for Former Bitwise Employees
The Fresno Area Hispanic Foundation created a fund for former Bitwise employees (including apprentices). Assistance ranges from $500 to $1,000.
The deadline to apply is Friday, Aug. 4. To apply, click on this link.