U.S. Wireless Data Files for Bankruptcy

Friday 26 March 2004 19:30 CET | News

U.S. Wireless Data (USWD) has filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, in the U.S. Bankruptcy Court for the Southern District of New York.

The company filed its petition to effect the sales of its two primary business activities which, together, represent substantially all the companys assets. The companys bankruptcy counsel is Halperin & Associates, and corporate counsel is Mintz Levin Cohn Ferris Glovsky & Popeo, P.C. The company also announced that it had reached agreement with NBS Synapse Corporation (NBS) to sell its Synapse point-of-sale gateway business to NBS for $2.85 million in cash plus up to $2.15 million credit for free payment processing services to be rendered to USWD for its vending operations. NBS will also assume certain liabilities. NBS is indirectly majority owned by Brascan Financial Corporation (Brascan), a Toronto-based financial services company that provides asset management and merchant banking services. The company simultaneously announced that it had reached agreement with SANI to sell its vending operations to Sani, including the $2.15 million credit for free payment processing services from NBS, for $1,600,000 in cash plus the assumption of certain liabilities. Under the Bankruptcy Code, other parties will have an opportunity to submit bids for these two business activities through a court-supervised competitive bidding process. The sales of these businesses to the winning bidder(s), which are subject to the approval of the U.S. Bankruptcy Court, are expected to be consummated by May 21, 2004. In the interim, USWDs businesses will continue uninterrupted and USWD will continue to provide its customers with the same quality of service they have come to expect. In order to maintain its continuity of service, the company also announced that it has arranged debtor-in-possession (DIP) financing with Sani in order to fund the companys ongoing operations during the bankruptcy process until the sales close. Subject to the approval of the Bankruptcy Court, the DIP financing will provide adequate funds to support the companys ongoing business requirements. The company does not expect that the proceeds from the sales described above or from the sales of any other assets will likely be sufficient to fund any payment to shareholders once creditor claims have been administered by the U.S. Bankruptcy Court.

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Categories: Payments & Commerce | Payments General
Countries: World
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Payments & Commerce