Did Voce die overnight, without warning?
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Posts with tag bankruptcy
As if there wasn't enough scandal surrounding the bankruptcy of BenQ Mobile, the dead handset company has just filed its third lawsuit since July against former parent company BenQ. This time BenQ Mobile's insolvency administrator Martin Prager wants €26 million Euro ($36 million US) to pay executive bonuses that BenQ the parent approved, but BenQ Mobile had to pay after BenQ pulled the investment plug. In July Prager filed two lawsuits that amounted to €80 million ($110 million US) for account payables made by BenQ Mobile to BenQ in 2006. BenQ's considering counterclaims against those July suits.
We already had a decent hunch that Prexar Mobile would come into play here, but a Delaware judge has officially green lit the sale of Amp'd Mobile to United Systems Access, which will give "thousands of customers a chance to switch carriers in the wake of the startup venture's collapse." United Systems will reportedly offer service to Amp'd customers under its Prexar Mobile brand, and interestingly, Amp'd will be getting a "25-percent stake in Prexar." Additionally, it was noted that Amp'd Mobile will be paid according to "how many of its customers switch service to the small Maine-based wireless provider, what plans the customers choose, and how long they stay with the new carrier." And you thought you'd never hear from these guys again.
Maybe it was Verizon's most recent in-court request to stop serving up costly airwaves for which it couldn't pay, maybe it was the cold reality that it'll allegedly have a mere $9,000 in the bank as of next Monday -- but at any rate, Amp'd Mobile appears ready to throw in the towel. The Verizon-serviced MVNO today filed with a bankruptcy judge to sell substantially all of its assets at auction after discovering that it was unable to line up debtor-in-possession financing, likely setting the stage for a full shutdown in the next few days. After launching less than two years ago to considerable fanfare and burning through a healthy $360 million, it's pretty shocking to see it all go down with such a whimper -- but hey, if you're looking to pick up a Q on the cheap -- that may or may not work on any other network, that is -- this may just be your chance.
Yeah, the court system may have given Amp'd a short stay of execution, but the troubled MVNO is far from being out of the woods. The latest chapter in Amp'd's bankruptcy saga has Verizon all fired up over its inability (or inaction) to get a loan lined up, all the while racking up some $370,000 in connection charges daily on Verizon's backbone. For anyone keeping count, that means Amp'd now owes Verizon something on the order of $56.6 milion, and the $9,000 (yes, nine thousand dollars) in Amp'd's coffers aren't quite going to cover the damage. In a court filing demanding that it be let out of its end of the well-breached agreement, Verizon says that it shouldn't be forced to participate as an "unwilling gambler" while Amp'd struggles to get back on its feet. Of course, if the plug does get pulled, it's an instant Amp'd death sentence -- so if you happen to be an Amp'd subscriber and your line goes dead, well, you can probably figure out how the court has ruled.
Apparently, it would just be far too easy for Amp'd to bow out of the fledgling MVNO realm after filing for bankruptcy, as the company has recently reached an agreement with Verizon Wireless that enables it to use The Network in exchange for Amp'd dropping its lawsuit. The suit was reportedly filed after Verizon moved to kick the Los Angeles-based Amp'd off its network, but we can't exactly blame Verizon for being quite perturbed after not receiving $33 million in payments. Of course, we're sure this spat is far from finished, but the case will press on next week while Amp'd customers can once again intrepidly chat away on Verizon's equipment -- for the time being, at least.
Bankrupt Amp'd Mobile has received an ever-so-brief stay of execution this week, thanks in no small part to the federal court system. The US Bankruptcy Court in Delaware has ruled that the MVNO has permission to use $7.5 million in cash from its largest creditor (and underlying service provider) Verizon, a sum Verizon was ultimately hoping to avoid paying out. $2.45 million of that loan will be need be held in reserve, but the remainder should be enough to keep Amp'd up and running until June 25. What'll become of the carrier after Monday, though, remains to be seen, pending the result of a lawsuit asking the court to prevent Verizon from shutting off its service altogether.
It appears to be nothing more than a little playful legal wrangling at this point, but Verizon's threat to straight-up disconnect Amp'd serves as a stark reminder to customers and other MVNOs just how critical the national carriers are to a virtual network's day-to-day operations. Verizon's argument, of course, is simple: Amp'd burns through tens of millions of dollars per month of The Network's airwaves, and nonpayment is grounds for sending out the "can you hear me now?" guy to Amp'd's house to disconnect the service, metaphorically speaking. This'll all play out in the courts over the next few days and months as Amp'd navigates the wide world of bankruptcy, but we've gotta believe Verizon isn't heartless enough to leave its paying customers in the dark.
We wish we could say we're surprised -- ok fine, we're always a little surprised when a company files for bankruptcy -- but it looks like Amp'd Mobile has filed chapter 11. We know the business has almost 200k subscribers, but apparently the business "couldn't keep up with the growth" -- but since when does growth and consumer interest in an MVNO's service equal business-rattling financial problems? Sounds like something weird is going on, but remember, chapter 11 just means down, not out. (Unlike the entirely out MobileESPN.) In other words, don't be surprised if Amp'd gets its business back in order and makes a triumphant return to the market -- or, you know, goes out of business entirely. [Warning: subscription req'd for link]
Another day, another company slamming the doors shut, and another governmental group prying them back open to sniff things out. Shortly after BenQ pulled the plug on its German mobile division (and somehow got its P51 to China), chief senior public prosecutor Christian Schmidt-Sommerfeld has initiated an investigation to find out just what went down behind the scenes of the now-closed company. It's possible that "a number of bankruptcy-related offenses were committed," such as delaying their filing for bankruptcy and overstating how many units were sold in the most recent quarter by a couple million. Rumors had already surfaced regarding management's knowledge of the cashflow quandaries and their adamant indifference towards finding a solution, eliciting statements of "being lied to" to mar the already unfortunate closing. Nevertheless, we're sure someone will get to the bottom of all this, but unfortunately there's nothing they can do to bring all those unreleased (and sexy) mobiles to market.
Auf wiedersehen, BenQ-Siemens, we hardly knew ye. Yes, the struggling German mobile division of BenQ has just filed for bankruptcy protection as per orders from BenQ headquarters in Taiwan. The International Herald Tribune reports that BenQ estimated the company has lost $762 million on the mobile division (which employs 3,000 workers) since it took over the Siemens business in October 2005. Further, The Associated Press adds that the German division will be completely excised from BenQ "financially and operationally once the bankruptcy protection is approved." It's too bad that we won't have the maker of "feminine luxury" or of the "Treo 600-killing" P50 to kick around anymore, because really, who doesn't love a good underdog?
Would-be Kickflip owners, Helio employees, rejoice: VK's back in the ring for another round. After a July 7 scare that had the Korean manufacturer facing liquidation, a bankruptcy court has ruled that they can conveniently forget their debts and obligations, freeing up cash for things like -- oh, you know -- manufacturing of phones. It'll apparently take the court a couple months yet to decide exactly if and how VK will be allowed to continue its turnaround, a decision that will be based largely on how the defunct company fares in the interim. If they agree to cut it out with the SLVR knockoffs, we're all for a complete recovery.
Officially, it was the discrepancy between the value of the dollar and that of the won, combined with aggressive marketing strategies of companies like Nokia and Motorola that have driven Korean battery-turned-handset maker VK into receivership, a form of bankruptcy. Personally, we believe it had something more to do with the boatload of unimpressive and stylistically unoriginal handsets (Kickflip notwithstanding) they've released since they entered the mobile phone game in 2002. Either way, they'll surely be missed; if not by us, then by SK Telecom and other investors who parted with billions of their won earlier this year in a failed attempt to keep VK afloat. Our only regret is that we won't get to pocket the 4-megapixel VK 2200, but since we don't live in South Korea, there's a good chance we never would anyway. Oh well, at least we'll always have CeBit.




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