NetVersant, in bankruptcy, seeking quick sale
December 11, 2008 -- The troubled contracting firm has also asked the bankruptcy court to prevent its creditors and subcontractors from taking action against its customers.
December 11, 2008 -- The recent Chapter 11 bankruptcy filing by NetVersant is predictably causing financial strain on the company's creditors and its subcontractors. In a late-November statement, Anixter said it will record an expense between $20 million and $22 million for the current quarter to increase its reserve for doubtful accounts. Anixter and its subsidiaries are unsecured creditors owed $28.6 million according to NetVersant's filings.
Anixter was one of three companies making up the Creditors' Committee in the NetVersant bankruptcy case; the others are Westcon Group North America and Sprint Solutions Inc.
As part of what are known as first-day motions in the bankruptcy proceedings, NetVersant asked the overseeing judge to prevent subcontractors and suppliers—a list that reportedly includes more than 100 organizations—from taking action against NetVersant's customers because their doing so could freeze cash flow and force the company to liquidate.
Subsequently, the company gained approval by the judge to hold an auction of its assets on Wednesday, December 17. According to this Internet post from bankruptcy-research firm netDockets, NetVersant's goal is to sell itself quickly and the bankruptcy court is paving the way for such a sale. According to the schedule outlined, by Friday, December 19, the auction would be complete and an approval hearing would be underway in bankruptcy court.
This report on Sprint from BusinessWeek provides more detail about NetVersant's creditors and its apparently pending sale.
Anixter has not made any further comment on the NetVersant case since November 21. A spokesman for Westcon Group declined comment, and NetVersant did not respond to correspondence requesting comment.
We at Cabling Installation & Maintenance will continue to follow the case and provide reports as well as links to the reports of others.