Buzzeo asset A troubled Arizona company that failed to deliver $4.7 million in software ordered by the University of Hawaii has announced a fire sale of its assets, but didn't bother to tell the university.
auction surprises
client UH
The software firm has failed
to live up to a $4.7 million contract
with the universityBy Tim Ruel
Star-BulletinEarlier this month, Buzzeo Inc. was to auction off everything it owns in bulk, including office furniture, equipment and any basic computer code still under development.
UH officials only learned of the development last week, said university spokesman James Manke.
The university was supposed to take over computer code developed by Buzzeo as part of a remedy for the company's failure to complete its contract.
Now the university is trying to find out whether the announced auction took place.
"We're aware of it, and we're looking at our options," Manke said.
A Buzzeo official could not be reached for comment.
UH officials have said they would either get their money back from Buzzeo, or sue. The university has already paid Buzzeo the full $4.7 million.
By law, any cash received from a full-scale auction should go to Buzzeo's creditors. But it is not clear how high UH would be on the list of those who would receive payment, or how much of a payment the university would receive.
Buzzeo was supposed to design a complete platform, based on the World Wide Web, to manage information for the university's admissions, registration, class scheduling and transcripts.
The university's Board of Regents originally approved Buzzeo's contract in June 1997. At the time, regents were told Buzzeo was ahead of its time, and the university could not build the system on its own.
In his 1998 State of the State address, Gov. Ben Cayetano referred to Buzzeo as one of a few high-tech companies that were a sign of hope amid the state's rough economic times.
As part of the contract, the university took a small ownership stake in Buzzeo that was supposed to help pay to develop a $10 million regional technology center in Buzzeo's offices at 1601 Kapiolani Blvd. The center was to hire 30 employees, primarily from the university, and offer a total of $1.2 million in annual salaries.
But in mid-1998, Buzzeo closed its Hawaii office and shifted operations back to the company's headquarters in Scottsdale, a suburb of Phoenix, Ariz. At the time, the company said the move was the requirement of a new investor.
The owner of the Kapiolani office building sued Buzzeo for back rent and for the costs of a contractor who was not fully paid for renovating Buzzeo's offices. In July 1999, the court awarded the office owner $300,000, records show.
In the same year, Oklahoma City Community College also sued Buzzeo, alleging the college had paid for $500,000 in software that was never delivered. Buzzeo countersued, alleging the college breached its contract by not paying Buzzeo. The two sides settled last year.
Meanwhile, Buzzeo missed its deadline to deliver UH's student information system in time to beat the year 2000 computer bug. As a result, the university spent additional time and money to get its old, outdated system geared up for the Millennium Bug.
Buzzeo finally delivered the first small piece of the system to UH earlier this year. Shortly after delivery, however, Buzzeo informed the university that the company was getting out of the business of developing information systems, and would not complete the project.
There is no exact figure for how much it could cost the university to finish the package on its own.
UH officials had been looking forward to getting the computer code -- and money -- from Buzzeo to help finish the project over the next several years.
Ka Leo O Hawaii
University of Hawaii