Noose tightening in bankruptcy investigation

I think this article is incorrect in many ways and full of inuendo and assumption. In publishing this article, Inside Greentech, you may be opening yourself up to a lawsuit. I think you should better check your facts and your sources before releasing such information. This bancruptcy case has not been settled, and until it does, Inside Greentech, you should refrain from publishing articles that can be construed as misleading and spreading false rumors. Inside Greentech, I think you should have your lawyers look over this article and consider publishing a retractment statement.
Concerned

All bankruptcy proceedings are a matter of public record. So it's easy enough to verify the central facts and all the quotes contained in this article, which appear to come directly from court documents submitted by officers of the court, just as the article attributes.

(specifics on how to access public records below)

Empty threats aside, the anonymous posting objecting to the article doesn't offer anything more than its defensive headline -- no alternative information to counter the apparently well-researched and cited contents of this piece.

Anyone with more than a passing interest in this developing story might be even more startled by the "evidence and record" of the cases documented so far by a large cast of officials: the bankruptcy trustee appointed by the court, another lawyer hired to assist him, a Special Counsel to lead in the investigation, a forensic accountant and a federal judge presiding. Between them, they have many, many years of experience in bankruptcy and fraud. Reading their words, they each seem to be taking this very seriously and are earnestly investigating what the trustee calls the "machinations" of the various entities and indivuals involved in this series of bankruptcies.

It is fair to say the bankruptcies are not yet settled and perhaps it's too early to draw any conclusions about the outcome. But make no mistake about it, the documents, case history, employment of a growing number of professionals to investigate (with an order to procure the lap tops, a forensic computer data specialist can't be far behind), the trustee's various motions to the court -- particularly moving the California cases to North Carolina, the judge's court orders granting all the trustee's motions in their entireties and the transcripts for a number of Order to Show Cause Hearings (just one OSC hearing would be noteworthy enough), all indicate clearly that there are important matters involved here that require thorough and vigorous investigating.

For those wanting to check facts and sources:

PACER

Public Access to Court Electronic Records, the central site for electronic access to proceedings and records of the federal judiciary.

http://pacer.psc.uscourts.gov/uspci.html

Click on USPCI LOG IN, in the blue navigation bar on the left.

Either enter your id and password or click on REGISTER to create an account if you do not already have one. ;-)

Once successfully logged-in on the US Party Case Index page, select BANKRUTPCY under the SEARCH heading, to search bankruptcy court records

On the search form, enter Party's name (Seertech, VoltaFlex, Rolltronics) and hit search button.

Click on case number.

Click on HISTORY/DOCUMENTS

Click on individual document numbers to download and read the .pdf files. The nominal cost to view and download files is 8 cents a page for a maximum charge of $2.40 per document.

Seertech Corporation, case # 06-31156, Western District, North Carolina (Charlotte)

VoltaFlex Corporation, case # 06-10544, Central District, California (Santa Barbara)

Rolltronics Corporation, case # 06-10545, Central District, California (Santa Barbara)

Bachinsky worked in private equity and consulting and didn't even know of Sauvante prior to the litigation at Rolltronics and VoltaFlex. Bachinsky got involved with Sauvante in 2005 in a good faith effort to try to rescue the the technologies for further development for the benefit of all stakeholders.

Previously, Bachinsky was a Managing Partner of Viridian Capital Partners in Charlotte, NC. He was in the preliminary stages of forming a second private equity firm when he was approached about trying to help Rolltronics. Draft versions of the private equity fund that was under formation dated January, 2005 were submitted to the trustee and clearly demonstrate that Bachinsky had no prior involvment with Sauvante, Rolltronics, VoltaFlex or any other corporate entity previously created by Sauvante.

Bachinsky testified that he was the first employee at Alydaar and began formal work there in early 1993. He stated clearly that he was not an officer or director and he worked to help build the company. He departed in 1997 to begin a career in private equity. At the time of his departure in mid-1997, the company had more than 200 software professionals and a client list that included stellar Fortune 500 companies such as McDonnell- Douglas and 3M.

As an early employee, he contributed to the technical strategy, operations and a variety of other management tasks. He had a meager $35,000 salary when he left, but had earned his shares in the company through sweat equity.

Bachinsky's testimony regarding the amount of capital raised by Rolltronics and VoltaFlex NEVER confirmed any amount. When the question about the topic was poised to Bachinsky, his response was "is that it?" referring to his lack of knowledge on the topic. Hardly a confirmation. He also testified that he never was an officer, director or shareholder in Rolltronics or VoltaFlex and never had access to any corporate records of those companies. The writer's creative interpretation of the actual testimony demonstrates the malicious agenda that appears to be behind the stories posted to Greentech.

Subsequent testimony by Suavante revealed that those companies only raised approximately $3 million. A shoestring budget for a materials development company in Silicon Valley.

The advanced display technology that was being developed by Rolltronics and later by Seertech was labeled “FASwitch” technology. By 2003, the development team had a good quantitative understanding of how the technology could be made to work and all throughout 2004 improvements in materials selection and cell design were made. From the very beginning, it was clear that the technology worked as well as the inventors had anticipated and they were able to demonstrate various generations of working display panels at the Flexible Display Conference in February 2005, at the Society of Information Display Conference in June 2005, and at a major display conference in Japan in late 2005 or early 2006. The development team had discussions with several companies both in the US and abroad with technical expertise and production facilities for the creation of these displays and received positive feedback on the possibility of taking the technology into mainstream manufacturing. Prototype development was going on with Dai Nippon Printing, the world’s largest printing company, at the time of business discontinuation.

FASwitch material samples, video of functioning panels, digital images from the aforementioned conferences and other technology evidence was submitted to the trustee.

In early 2003, VoltaFlex of CA had negotiated a licensing deal with MIT to commercialize a new battery material technology. An effort was made to vet the technology independently of the MIT information and their representations. Over that summer, VoltaFlex secured fresh polymer bought from an outside custom chemical lab and worked with a researcher at Lawrence Livermore Labs to create 30-40 test batteries that could be analyzed to be sure that the performance claimed by the MIT researcher was reproducible. By December of 2003-January 2004 VoltaFlex had the working cells and the analysis. In those first batteries, it was determined that the performance of the material was not as represented, having neither the lifetime stability nor the energy storage capacity that VoltaFlex had been lead to believe it would. Additional research and capital expenditure would be required to further develop the materials. The license agreement only provided for mass production using "roll-to-roll" manufacturing techniques and did not allow for limited production of hand made specialty batteries. Seertech made a request to MIT to expand the scope of the license to allow for production of hand made specialty batteries, but MIT denied the request. Therefore, Seertech determined that the technology was not core to the future development plans of the company and the license was returned to MIT.

The battery samples, technology development reports and letters and emails to MIT identifying the deficiencies found in the materials were delivered to the trustee.

There's been a spirited exchange in the message board for this story in recent weeks that's necessitated some intervention.

Some threatening, inflammatory comments were posted, which I've removed. Some tactless, potentially defamatory inferences have been edited out.

Why the edits? It's consistent with the terms of use of this web site, and commonly accepted practice. Comments for this story are now locked.

In the interest of letting some tell their side, I've left most of the comments coming to the defense of Bachinsky and Sauvante intact, despite inconsistencies with the actual rulings and records posted on the Internet in PACER.

For readers unsure of what to make of all this back and forth, in the spirit of closure, here's an excerpt from an order just handed down by Judge J. Craig Whitley, presiding on the Seertech bankruptcy case, dated September 12th, 2007.

According to company president Frank W. Bachinsky III ("Bachinsky"), Seertech was a "pre-revenue" technology company. Bachinsky's description is overly generous as to the true nature of this business. In actuality, Seertech and its predecessor entities were non-operational shell companies, created by their principals in succession to bilk investors ... in short, based upon the extensive testimony taken to date in this bankruptcy case, the Seertech entities were "scams."

The full 21-page court order is far more damning than the above.

The judge may or may not have arrived at the truth. But this is what the court has handed down. We don't make up the news; we just report it.

Dallas Kachan
Publisher, Cleantech.com