A Fresno County Superior Court Judge has ordered Bitwise Industries to halt to a sweeping number of transactions related to a dispute centering on its portfolio of five California properties it jointly holds with a Texas-based investment company.
The move came one day after a Houston-based NICByte LLC sued Bitwise Industries alleging the Fresno-based company improperly secured loans and was unauthorized in listing properties for sale.
Driving the news: Fresno County Superior Court Judge Jeffrey Hamilton issued a temporary restraining order freezing several assets of companies related to Bitwise Industries.
- NICbyte held a 95% interest in a joint venture – dubbed NICWise LLC – and invested $43 million in collaboration with Bitwise to buy seven properties in Fresno, Oakland, and Bakersfield.
- The lawsuit accuses Bitwise entities of taking out $30 million in loans using the properties as collateral without permission and in violation of the joint venture agreement. Bitwise entities also listed four properties for sale without permission from its partner.
- Parren James, a principal with San Francisco-based Grounded Capital, LLC, who is “authorized to act on behalf” of NICByte, alleges that Bitwise’s intentional malfeasance and other wrongful behavior is almost certainly motivated to save or enrich Bitwise Industries, the financially troubled Fresno technology company.
- James alleged that Bitwise co-CEO Jake Soberal made an “unnanounced and unscheduled” visit to the home of a NICByte affiliate.
- “This attempted personal visit was shocking and unwelcome in all respects. After the attempted visit and later that day, I spoke to Mr. Soberal over the phone and even during that call, Mr. Soberal concealed and failed to disclose the loans or recorded trust deeds,” James said in his declaration supporting the TRO request.
- The lawsuit asked the judge for a temporary restraining order to freeze seven bank accounts at Central Valley Community Bank, stop the sale of the State Center Warehouse in Fresno and three properties in Bakersfield, turn over books and other documents, prevent damaging the buildings or other documents, and set an injunction bond of $10,000.
- Hamilton granted the TRO at an ex parte hearing, and it will run through June 17.
Yeah, but: The bank account of the main company, BW Industries, Inc., was not frozen with Hamilton ruling against a key plaintiff’s request.
