Lenders are looking to have a mediation process in the Bitwise bankruptcy hearings en route to a settlement.
The hearing could also be adjourned for a few months to preserve the remaining assets that lenders can claim from Bitwise.
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The backstory: Bitwise filed for Chapter 7 bankruptcy in a Delaware federal court in late June, one month after furloughing its entire 900-person workforce.
- The failed real estate and tech company reported over $250 million in financial liabilities in its bankruptcy filing, as well as over $175 million in assets.
The big picture: In a court filing, interim Trustee Jeoffrey Burtch asked for an adjournment of 90-120 days, giving more time for mediation while keeping Bitwise from using up the assets that lenders could claim.
- Former Bitwise directors Ollen Douglass and Joseph Proietti had filed to access up to $5 million from an insurance policy to pay for legal bills, as well as restricting access for former Bitwise CEOs Jake Soberal and Irma Olguin to the insurance policy.
- Burtch said in the filing that at least eight law firms which are representing former Bitwise executives could have their fees covered under the insurance policy.
- With that many law firms able to draw on the policy, lenders are seeking mediation to prevent the policy from drying up.
What we’re watching: Even if Douglass and Proietti are given permission by the court to use the insurance policy, Burtch requested a $1 million cap for legal fees.
- Earlier this month Fresno-based lenders filed a motion to move the case from Delaware to Fresno County. In the filing, though, Burtch signaled his opposition to the move.
What they’re saying: “All parties, including the Former Directors, appear to be amenable to moving forward with a mediation process to attempt to reach a global settlement of the various claims against the former officers and directors of the Bitwise Debtors,” the filing reads.
