Who does bankrupt Bitwise Industries owe, and how much? See our searchable database

A Fresno Bee analysis of court documents in Bitwise Industries’ various bankruptcy cases in Delaware indicates that the company has almost $27.6 million in outstanding loans that are presumably secured or guaranteed by personal property or by membership interests in the companies.

But debts owed to hundreds of other creditors are unsecured, which will likely put them at the back of the line for payment when a bankruptcy trustee or judge eventually determines how Bitwise’s assets are distributed once they are liquidated.

The Bee has compiled a searchable, interactive database of secured and unsecured claims that readers can explore to learn more about particular creditors who are owed money in the bankruptcy cases. The database is compiled from Chapter 7 bankruptcy schedules filed in Delaware on June 28 by Bitwise Industries interim President Ollen Douglass.

Among unsecured debts deemed in the bankruptcy filings as “priority” claims are 68 outstanding tax bills owed to 22 states as well as the District of Columbia and the U.S. Internal Revenue Service; and more than 860 employee claims for unpaid wages from the bankrupt companies: BW Industries Inc., Bitwise Industries Inc., Alpha Works Technologies LLC; BWRD LLC; and Bruce’s Bagels, Beverages & Bites LLC.

Another 229 claims identified in court documents are listed as unsecured “nonpriority” claims – the lowest tier of debts in the pecking order of who ultimately gets paid. Those include 123 loans received by Bitwise Industries entities amounting to at least $77 million – including a handful of venture and private loans.

Of those nonpriority loans, more than $16 million came from businesses or individuals in Fresno, the court documents reveal. Almost $11.2 million of those loans were received by Bitwise within nine weeks of May 29, the date the company’s financial woes were dramatically revealed when it suddenly laid off its entire workforce.

The database includes 58 claims identified as “intercompany payables” owed by one Bitwise entity to another. That represents another $306.5 million in unsecured, nonpriority claims among the five companies.

The database does not include the 866 employee claims for unpaid wages, most of which are shown in the court documents with “undetermined” amounts, and many of which are also identified in the filings as disputed by the companies.

Altogether, the court documents identify a total of more than $511.4 million in debts owed by the Bitwise family of companies, although some of that appears to be duplicated amounts among the major secured loans and investments secured by Bitwise in recent years.

But the debt figure does not include the “undetermined” amounts for the employee unpaid-wage claims, taxes, a smattering of other loans and potential liabilities from pending lawsuits.

The court records show that Bitwise claims about $441.9 million in assets among the five business entities that filed Chapter 7 bankruptcy petitions last week.

The notations for “intercompany payables” among the debts and “intercompany receivables” among Bitwise’s assets also complicate efforts to determine the true total of property and assets that can be liquidated to satisfy creditors’ claims.

Bitwise also claims as assets leases for some of the buildings it occupied in some of the cities in which it operated. In Fresno, however, building owner Baltara Enterprises LP has taken steps to evict Bitwise from the three buildings that it owns in downtown Fresno, including the Bitwise South Stadium headquarters on Van Ness Avenue as well as the Bitwise 41 and Bitwise Hive buildings on Ventura Street.

Bitwise was founded in 2013 as a hub for training students in software coding and website design, technology services for local companies, and providing leased space to budding technology entrepreneurs and other businesses. The company also embarked on an ambitious program of expanding Bitwise’s geographic footprint – first within California to sites in Oakland, Merced and Bakersfield, and within the past two years to other states including Colorado, Illinois, New Mexico, New York, Ohio and Texas.

But on May 29, just weeks after the company’s 10th anniversary, its now-former co-CEOs, Jake Soberal and Irma Olguin Jr., told all of the nearly 900 employees nationwide – including almost 400 in the Fresno area – that they were being placed on immediate furlough. In an exclusive interview with The Fresno Bee, the pair attributed the move to acute and “unexpected” financial troubles.

Soberal and Olguin were terminated by the Bitwise board of directors on June 2. In an email to employees, Douglass wrote that he and the other board members, “like many of you, are finding out that the picture the company consistently communicated orally and in presentations, was not an accurate picture of the company’s financial health. Douglass pledged an investigation into how the financial situation had deteriorated.

On June 14, in another email, Douglass notified employees that their jobs were being terminated in a mass layoff nationwide.

In the bankruptcy court filings, Douglass stated that the “books and records of the Company are substandard and materially incomplete” because of “substantial irregularities” in Bitwise’s accounting practices.

“The lack of organized and well-kept books and records, as well as obstacles resulting from an inability to access and verify certain financial information such as bank accounts has hindered the Company’s ability” to make a true estimation of the amounts owed to some creditors, Douglass added.

In the weeks since the abrupt announcement of the furloughs, there have been revelations about cracks in the company’s financial foundation, from previous lawsuits over buildings and tax credits to unpaid county property tax bills and city business license fees.

Bitwise and its leadership have also been hit by a raft of lawsuits alleging violations of state and federal labor laws for failing to give employees a required 60-day notice before the furloughs and layoffs, as well as fraud and bad faith in its efforts to solicit loans from investors throughout the Fresno area and elsewhere in the weeks before the financial collapse.

State and federal agents have also embarked on criminal investigations of Bitwise and its activities, according to several sources familiar with the probes who spoke to The Bee on condition that they remain anonymous. While the bankruptcy filings create an automatic stay on the civil lawsuits confronting Bitwise, they have no impact on a criminal probe of the company or its leaders.

What’s under the Bitwise umbrella?

More than 20 different corporations, limited liability companies or limited partnerships have been contained under the Bitwise Industries umbrella since the company was founded in 2013 in Fresno, according to business filings with the California Secretary of State. They include:

• Bitwise Industries Inc.: Technology company, initial state filing of organization in August 2014.

• BW Industries Inc.: Software company incorporated in Delaware in 2019.

• Alpha Works Technologies LLC: Technology company, originally organized in 2016 as Geekwise Academy; name changed to Alpha Works Technologies in 2021.

• 747 R Street LLC: Real estate holding company, organized 2022.

• 1701 Partners LLC: Real estate investment, organized 2019, terminated 2023.

• 1701 18th Street LLC: Real estate holding, organized 2022.

• 1715 18th Street LLC: Real estate holding, organized 2022.

• 1723 18th Street LLC: Real estate holding company, organized 2022.

• BITWISEBKF LLC: Technology company, organized 2019, terminated 2023.

• Bitwise Coworking LLC: Shared working environments, organized 2017 as Hashtag Cowork; name changed to Bitwise Coworking in 2021.

• Bitwise Technology Consulting LLC: Technology company, organized in 2016 as Shift3 Technologies LLC; name changed to Bitwise Technology Consulting in 2021.

• BLDG Services LLC: Property management company, organized 2016.

• Bruce’s Bagels, Beverages & Bites LLC: Restaurant/cafe, organized 2018.

• BWRD LLC: Software / technology development, organized 2017.

• BW Capital Fund I LP: Incorporated in Delaware in 2021.

• BW Childcare LLC: Child care entities, organized 2021.

• MyDesignDeals LLC: E-commerce, organized 2017, terminated 2023.

• New Excambium LLC: Investment holding company, organized 2021.

• OMW APP LLC: Mobile ordering application, organized 2017.

• Techtonic Group Inc.: Technology company, formed in Colorado, incorporated in Delaware.

• Wishon Row LLC: Investment holding company, organized 2018.