One day after it filed bankruptcy, two companies are vying to
purchase local Internet service provider Hollinet and its 2,000
Hollister residents.
One day after it filed bankruptcy, two companies are vying to purchase local Internet service provider Hollinet and its 2,000 Hollister residents.
James McDonald, owner of Iamis Information Services, Inc. out of Antelope, Calif., and South Valley Internet out of San Martin are aggressively negotiating with Hollinet’s attorneys to take over the business before service is completely shut off.
“I’ve been working with the attorneys longer, so I guess the race is on,” McDonald said. “But the landlord is looking to evict what’s left of the company as soon as possible, and Pacific Bell and PG&E are the same way. If it goes on longer than next week, it will just drop off the face of the earth.”
McDonald, who has been Hollinet’s technical advisor since the business opened in 1996, was notified by Hollinet’s owners Darlene Colvin and Brent Olson that they would be filing late last week and immediately began working with their attorney, Merrill Zimmershead, and trustee John Richardson, to acquire the business, he said.
But after learning of the company’s filing for bankruptcy, Roy Engehausen, co-owner of South Valley Internet, faxed Zimmershead a letter late Thursday expressing his interest in taking over the company, he said.
“Even though there’s this other company that’s interested, we’re interested in it too,” Engehausen said. “We’ll see what can come out of it. Just because someone else is interested isn’t going to scare us away.”Zimmershead and Richardson did not return phone calls to their offices Thursday, and Colvin and Olson were unavailable for comment.
The acquisition of Hollinet by a local company is important, Engehausen said.
“I hope we can work something out,” he said. “I’m sure most people would rather stick with a local company.”
If McDonald is able to purchase Hollinet, he said he would keep everything the same, from the company being locally operated to the name.
“It will still be a local company,” McDonald said. “For at least eight years the companies existed side by side. At any time, customers could have chosen South Valley and they chose not to. It’s important not to remove an option for people.”
Before learning of South Valley’s intent to purchase Hollinet, McDonald said transitioning the business to a new owner as seamlessly as possible is his ultimate goal to ensure that none of the customers are left without service.
If negotiations go his way, that transition should take place sometime next week, he said.
“E-mail addresses should stay the same, log-in names and passwords stay the same, Web sites should remain up and running,” he said. “The only people that will really have to do any changes are people who are dialing up to the Internet through a modem… they will have a new number to dial into.”
McDonald contacted Bob Davidson, an Internet technician with the city of Hollister, to inform him of his plans Thursday. The city receives its Internet service through Hollinet.
Davidson said he has worked with McDonald in the past and believes him to be professional and technically competent.
“It would have been a fire drill if all of a sudden the server was cut off,” Davidson said. “Like, now what do we do?”
Although he wasn’t sure of the details, filing for bankruptcy was a last minute decision on Hollinet’s part in a hope to continue service for its customers, which resulted in its inability to notify its subscribers, McDonald said.
After the owners filed, the business was immediately turned over to the trustee, disassociating Colvin and Olson with the business completely, McDonald said.
“They’re really not able to perform any functions at all related to the business at this point,” he said. “Once the trustee has the case, the former owners are prevented legally from interacting with customers directly, operating the business or doing anything else.”
After they filed for Chapter 7, it put an immediate stay on anyone closing down services, such as creditors cutting off phone lines or the landlord evicting them from the building, which would have disconnected Internet service for all of Hollinet’s customers, he said.
“It was not something they were working on, making the arrangements to sneak out the back door,” McDonald said. “The last thing they wanted was for everything to just drop off the face of the earth. So that bought them some time.”
Keeping an ISP local is extremely important to the community’s economy and to people’s peace of mind when dealing with something as complicated as the Internet, said Economic Development Director Al Martinez.
“They provide a lot of service to local people. That’s what’s lacking when you deal with the outside – you don’t have that one-on-one,” Martinez said. “Especially with the Internet… They keep you up to speed.”
