Information for Creditors of Blackridge Technology International
Case Number 20-50314 in the United States Bankruptcy Court for the District of Nevada
341 MEETING OF CREDITORS
A continued 341 meeting is set for May 4 at 2:00 pm.
The 341 meeting is conducted by the United States Trustee’s attorney and the Debtor’s representative – usually its CEO – is required to attend. Creditors are allowed to attend either themselves or through counsel and ask the Debtor’s representative questions about the Debtor’s finances and why the Debtor is in bankruptcy.
Due to COVID-19, the 341 meeting will be held by telephone. You are allowed to call in or you can hire an attorney who can call in for you and ask questions.
Some topics that should be addressed at the 341 meeting include:
- The relationship between the Debtor and Blackridge Technology Holdings.
- Why Blackridge Technology Holdings is not also in bankruptcy.
- The reason why the Debtor included equity holders on its list of top 20 unsecured creditors.
TAKE ADVANTAGE OF NO SECURED DEBT
Blackridge has filed forms in the case called “Schedules” and the “Statement of Financial Affairs.” These forms give creditors information about the Debtor’s current financial position, including information about assets and liabilities.
Amazingly, the Debtor reported that is has no secured debt. That means that there are no creditors who have liens on any of the Debtor’s assets. These creditors typically get priority in payment over unsecured creditors like trade vendors and small businesses. Since this Debtor has no secured debt, unsecured creditors are in a great position to steer the case in a positive direction.
Unsecured creditors could be even more well positioned if they form what is known as a Committee of Unsecured Creditors. In Chapter 11 bankruptcy cases, Committees are formed to help small businesses and trade vendors get a better outcome without the financial toll that hiring individual counsel can bring. That is because Committees can hire attorneys who are paid for by the Debtor. This case seems ripe for a Committee.
EQUITY HOLDERS WILL TRY TO TAKE OVER
The Debtor claims that it owes the Yalamanchili family over $15.5 million. While the Debtor included these debts on its list of unsecured creditors, it also revealed that several Yalamanchili family members are stockholders. This makes them equity holders and insiders, not general unsecured creditors.
The Yalamanchili family has already formed its own group and has hired counsel to represent it in the Debtor’s bankruptcy case. This group will act in the interest of equity holders because its members are equity holders. The group will not act in the interests of unsecured creditors.
Without a voice in this case, trade creditors and small businesses could lose out to the larger voices of equity holders, who will do all they can to recover their investment.
PRLT does not represent Blackridge Technology International. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the Blackridge Technology International bankruptcy case or anything discussed on this page, please contact us.