The fate of local Internet service provider Hollinet, which
filed for bankruptcy last week, remains uncertain as one
prospective buyer believes he will own the company by today and
another believes he’s still in the running.
The fate of local Internet service provider Hollinet, which filed for bankruptcy last week, remains uncertain as one prospective buyer believes he will own the company by today and another believes he’s still in the running.
James McDonald, owner of Sacramento-based company Iamis Information Services, said he and Hollinet’s bankruptcy trustee John Richardson agreed that he could purchase the company Wednesday. Richardson did not return several phone calls to his office Wednesday.
“People will not wake up (today) with no service,” McDonald said. “We have reached a verbal agreement and are finalizing the documents.”
Roy Engehausen, co-owner of South Valley Internet out of San Martin, also is trying to buy the company through his attorney, but has been unable to contact Richardson and learn the details of the discussions with McDonald, he said.
“We’re still trying to get the whole story,” Engehausen said. “We’re prepared to move on purchasing the company immediately. I can write a check out tomorrow, but we’re waiting on Richardson – I have yet to be able to contact him. Evidently Mr. McDonald was more successful than we were.”
After Hollinet’s owners, Darlene Colvin and Brent Olson, filed for Chapter 7 last Wednesday and the company was officially turned over to Richardson on Monday, it was up to him to determine who he wanted to sell the company to, McDonald said.
“The trustee and I are on the same page as to what needs to be accomplished,” McDonald said. “We have a lot of the same ideas in terms of what needs to be done… to get out of Chapter 7 and into being a viable business again.”
After the verbal agreement was made between McDonald and Richardson yesterday, McDonald said he would be finalizing the documentation and taking it to the Northern District of California United States Bankruptcy Court in San Jose sometime today.
Engehausen spoke with McDonald after his meeting with Richardson and said both company owners agree their primary intention is not to disturb the service of any of Hollinet’s users.
“We want to make sure this is done right and customers’ service doesn’t get interrupted,” he said.
If McDonald gets the pertinent paperwork filed through the court today and the company officially becomes his, Engehausen said he will be amazed that it happened that quickly.
“I’ve purchased a number of other companies through bankruptcy and I’ve never seen it go so fast,” he said.
McDonald said the speedy agreement was made because Richardson realized he would not be able to afford the ongoing costs of running the business and paying off the creditors, and if a decision wasn’t made, service would be terminated.
“If we couldn’t have come to a decision (Wednesday) he would have had no choice but to call everybody up and say we can’t pay you,” he said.
After the documents are finalized today, McDonald said he will begin “cleaning up the mess.”
The first thing he plans to do is let all of Hollinet’s customers know the status of the company, he said.
“There has been a lot of panic,” he said. “The main thing is that service will not be terminated and we’re working out the final details of what we need to file with the court.”
Erin Musgrave can be reached at 637-5566, ext. 336 or at
