Hollinet, a local Internet service provider that serves more
than 150 local businesses and nonprofit organizations, is filing
for bankruptcy.
Hollinet, a local Internet service provider that serves more than 150 local businesses and nonprofit organizations, is filing for bankruptcy.
The company, which opened in 1996, voluntarily filed for Chapter 7 yesterday with the Northern District of California United States Bankruptcy Court in San Jose, according to the court’s public information system. Earlier this week, the company also notified the San Benito County Chamber of Commerce that it planned to file for bankruptcy, chamber officials said.
Hollinet filed for Chapter 11 in November of last year, which would restructure the organization, but then filed Chapter 7, or bankruptcy, on Wednesday, according to the bankruptcy court.The company’s clients include San Benito County, the city of Hollister, the San Benito County Chamber of Commerce and many local businesses, nonprofit organizations and individuals.
The company’s owners, Darlene Colvin and Brent Olson, could not be reached for comment Wednesday. Their attorney, Merrill Zimmershead, refused any comment until he spoke with his clients, stating confidentiality agreements. It is not clear how many customers will be affected at this time because company representatives could not be reached for comment.
Theresa Kiernan, executive director for the chamber of commerce, received a notification of the company’s filing for Chapter 7 on Monday, she said.
The chamber also received a notice in November stating Hollinet’s filing for Chapter 11, which didn’t phase Kiernan at the time, she said.
“It was a reorg,” she said. “They just wanted to take a breather and reassess themselves.”
Chapter 11 is classified as a business reorganization. It allows a business to refinance and to create a plan for paying off its debts. Chapter 7, however, is straight bankruptcy, in which the company is appointed a trustee by the court to count its current assets and pay the company’s debts.
The Chamber was notified Hollinet would be filing because the company has an outstanding debt with them, Kiernan said.
By law, the company is required to notify all of their creditors that they are filing for bankruptcy, said Rita Baldwin, a bankruptcy attorney out of Morgan Hill.
Hollinet provides e-mail service and Internet service to the city of Hollister, said Paul DaSilva, an Internet technician for the city.
“We’ve heard rumors but it’s just been hearsay,” DaSilva said. “How it will affect us, I have no idea.”
When Hollinet officially notifies the city, they will start looking at other providers, he said.
“It will take a little research as far as who’s available and what’s the most cost efficient,” DaSilva said. “It will also depend on how long until we’re cut off from Hollinet.”
Grunnagle-Ament-Nelson Funeral Home has used Hollinet for about five years and also wasn’t notified of its bankruptcy filing, said co-owner Thomas Ament.
“We’ve been pleased with it, and I’m disappointed they’re leaving because it means I have to make changes,” Ament said.
Part of Ament’s satisfaction with Hollinet stemmed from their locale. Problems were easy to fix because someone was nearby to walk them step by step to a solution, he said.
“It’s like anything,” he said. “They’re local, so they care about the local people.”
Hollinet, along with South Valley Internet Service out of San Martin, are the two largest local Internet service providers in the area.
Rumors about the company’s filing recently caused a handful of Hollinet customers to sign with South Valley, said that company’s General Manager, Elise Brentnall-Alexander.
“We heard through the grapevine that this is what has happened,” Brentnall-Alexander said. “There had been rumblings for awhile, but it was just rumors so we couldn’t trust it.”
Brentnall-Alexander hasn’t spoken with Hollinet’s owners yet, but would like to set something up where Hollinet’s customers could switch providers as seamlessly as possible, she said.
“It’s really all up in the air as to what’s going on,” she said. “But we will do our best to help out… to work to save customers a lot of hassles.”
Hollinet’s first court date is scheduled for May 20.
