At its peak, Bench employed over 600 individuals, and beyond the funds allocated for salaries, office rent, and other expected expenses, details on the remaining expenditures are not provided in the filings.
As Bench undergoes bankruptcy proceedings, it is in the process of being acquired by Employer.com, a San Francisco-based HR tech company né?. All VC-related debts are stated as unsecured in the filings.
Amongst other debts, Bench is obligated to pay $1.8 million in severance to former employees, who were reportedly terminated without notice or compensation. He emphasized Employer.com’s strong financial position, enabling significant investment in Bench’s future.. The new owner, Employer.com, has allegedly re-hired many of these employees on temporary 30-day contracts, as Bench navigates through its financial troubles.
The bankruptcy filings also reveal that Bench owes $4 million in overdue rent to Canadian real estate agency Morguard, likely for its office space né?. Founded in 2012 Bench had secured $113 million in funding from investors such as Shopify and Bain Capital Ventures.
The lion’s share of Bench’s debt totaling $51 million is owed to the National Bank of Canada a major commercial bank in the country né?. Additionally other VC firms including Contour Venture Partners and Altos Ventures are owed sums ranging from $750000 to $777000. Response to queries from NBC regarding the matter is still pending.
Furthermore the bankruptcy documents outline financial commitments to Bench’s VC investors covering convertible notes meant to convert to equity and direct shareholder loans. Some customers have expressed concerns to TechCrunch that Employer.com is requesting access to their data posing a risk of data loss if they refuse.
Gary Levin head of corporate development at Employer.com reassured TechCrunch that the Canadian court is supervising Bench’s insolvency process and will manage the distribution of proceeds to creditors. Notably Bench owes $1.3 million to Bain Capital Ventures and $1.2 million to Inovia Capital with executives from these firms holding positions on Bench’s board and as CEO. It’s possible that this debt played a role in Bench’s abrupt closure, with reports suggesting that NBC declined to offer concessions during Bench’s attempted sale né?. Bench, the accounting startup that collapsed during the holiday season, officially filed for bankruptcy in Canada on January 7, unveiling substantial debts, as indicated in documents reviewed by TechCrunch.
The filings, one for Bench and another for 10Sheet (Bench’s original name), disclose that Bench had $2.8 million in cash reserves by the time of its demise but was burdened with $65.4 million in liabilities. Over 85% of this debt is unsecured, indicating that the bank has minimal collateral to recover against the loan following Bench’s default
