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Will Bitwise Employees, Lenders Get Money Back? Mediation Starts.

Will Bitwise Employees, Lenders Get Money Back? Mediation Starts.

Dozens of attorneys involved in the Bitwise Industries bankruptcy and subsequent lawsuits meet in New York starting Tuesday for mediation hearings.

Attorneys tell GV Wire that the goal is to figure out how much money Bitwise has left, and who will get paid. The bankruptcy paused most of the civil suits. The results of the meetings, known as a global mediation, could resume some aspects of the litigation.

The two-day meeting will serve as a settlement conference between bankruptcy officials, creditors, and those suing Bitwise or its leadership.

Bitwise, the Fresno-based tech and real estate company, filed for bankruptcy last June, after GV Wire broke the story of major financial problems within the company. Nearly 900 employees nationwide lost their jobs.

A criminal investigation ensued, leading to fraud charges against the company’s former co-CEOs — Jake Soberal and Irma Olguin Jr. They are scheduled to next be in Fresno federal court on April 4.

Bitwise’s financial troubles and questionable real estate and fundraising deals led to several lawsuits from former employees, business partners, and lenders.

What Attorneys Are Looking For

Jeoffrey Burtch, the court-appointed trustee in charge of Bitwise’s assets since the bankruptcy, is expected to attend the global mediation.

Attorneys representing Bitwise’s remaining board of directors are also scheduled to attend. However, board members Paula Pretlow and Mitch Kapor have one set of attorneys while board members Ollen Douglas and Joseph Proietti have another set. Some of the civil lawsuits are trying to hold the board personally responsible for losses.

“There will be back and forth trying to resolve all the claims that are being made against Bitwise by secured creditors, the employees and otherwise,” said Fresno attorney Roger Bonakdar, who represents employees in a class action lawsuit.

Bonakdar’s case, Garza v. BW Industries, is paused in Fresno County Superior Court until the mediation conference.

“This will be a pretty complex process. It’s involving more than a dozen law firms. And, obviously, several dozen claimants apart from the hundreds that we represent in the class action,” Bonakdar said.

At least 30 attorneys, including Bonakdar and other Fresno attorneys, are scheduled to attend.

Read the complete article here.

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