Once-defiant Bitwise ex-president now aiding bankruptcy probe, claims against leaders

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The former president of Bitwise Industries is cooperating with the court-appointed trustee who is shepherding the defunct Fresno technology company through its Chapter 7 bankruptcy case in Delaware.

Bethany Mily has reached a settlement agreement with bankruptcy trustee Jeoffrey Burtch in which she will assist with “the investigation and pursuit of potential claims against other former officers and directors” who were associated with Bitwise prior to and during its rapid demise in May and June of 2023.

Mily, who also goes by the name Bethany Griffin and now resides in the Chicago suburb of La Grange, Ill., was the president of Bitwise Industries from mid-2015 until the company’s collapse over Memorial Day weekend in May 2023. That’s when Bitwise co-founders and co-CEOs Jake Soberal and Irma Olguin Jr. stunned employees with the announcement that all 900 of the company’s workers and apprentices across the U.S. were immediately furloughed.

Soberal and Olguin were fired from their CEO positions by the remaining board members days after the furlough announcement, and Bitwise and four associated companies filed for bankruptcy in late June 2023. In addition to numerous civil lawsuits alleging that Soberal and Olguin misled and defrauded investors and lenders, the pair face federal criminal counts of conspiracy and wire fraud.

A deal in which Soberal and Olguin have agreed with federal prosecutors in Fresno to plead guilty in the criminal case is due to be considered by a U.S. District Court judge in a hearing July 17.

Court documents indicate that Mily, 45, has assisted Burtch’s office since Bitwise filed for bankruptcy on June 28, 2023. In a formal settlement agreement signed in January 2024, “the trustee believes the assistance that Ms. Mily can provide to the trustee may prove invaluable” in Burtch’s investigation of potential claims against other Bitwise leaders and directors.

The agreement calls for Mily to “reasonably cooperate” with Burtch on not only his investigation, but also in administering the assets and other issues for Bitwise Industries and its associated companies, “including, without limitation, prosecution of avoidance actions and claim objections” by Bitwise’s leaders. The deal, which runs through the end of 2024, calls for Mily to serve without compensation for up to 25 hours per month, and up to 15 additional hours at a rate of $150 per hour.

In return, “the trustee will not pursue any claims or causes of action … against Ms. Mily,” and Mily will release claims against the debtor companies except for assets in her Bitwise 401(k) retirement savings plan.

A hearing on Burtch’s motion seeking court approval of the Mily settlement agreement is set for October.

Throughout much of the latter half of 2023, Mily had refused requests from Burtch’s office to turn over her Bitwise-issued laptop computer based on her assertions “that it may contain information that is subject to attorney-client privilege.” The trustee maintained that because the computer was company property, it was part of the bankruptcy estate and should be provided to Burtch. The trustee also suggested that the return of the laptop be a condition of a court order for Mily to benefit from a Bitwise insurance policy to provide legal defense in civil lawsuits or criminal investigations.

Neither the settlement agreement nor other documents in the bankruptcy court case indicate whether the disputed laptop computer or a memory device with its contents have been surrendered to the court. But Bankruptcy Judge Mary Walrath issued a consent order in December allowing Mily to make a claim against the insurance policy for legal fees and costs.

The Bee was unable to reach Mily for comment on this story.

While the proposed agreement, if approved by the court, would release Mily from claims associated with the Bitwise bankruptcy, she remains a defendant in two civil lawsuits filed in Fresno County against Bitwise, Soberal, Olguin and others, alleging fraudulent business dealings.

Mily joined Bitwise in mid-2013 as a freelance curriculum developer for Bitwise’s Geekwise Academy, a technology training program, and became Bitwise’s president two years later, according to her LinkedIn professional networking profile.

Previously, she worked at the Center for Advanced Research and Technology or CART, a high school technology program for students in Fresno and Clovis, first as a teacher from 2005 to 2013, and then as the school’s dean of curriculum and instruction from 2013 to 2015, overlapping with her time as a curriculum developer for Bitwise.

Mily is not the first former Bitwise executive asked to help Burtch’s office untangle the company’s web of financial issues. In August 2023, the bankruptcy court approved retaining Landon Brokaw, who worked for Bitwise from mid-2016 through May 2023. Brokaw was the company’s executive director of sales before becoming Bitwise’s chief corporate development officer in early 2022.

At the time he was retained as a $200-per-hour consultant by the bankruptcy trustee, Brokaw had lodged claims in the bankruptcy case alleging that he was owed more than $15,000 in unpaid wages as well as an unsecured $110,000 loan he had made to Bitwise.