Neverblue to be Sold at Auction to Pay DebtsWritten by Pace Lattin
June 5, 2012 # 4:41 pm # Industry News, Specials # 38 Comments
According to DowJones.com, Velo, the parent company of Neverblue and AKMG has been given the go-ahead to sell its assets at a bankruptcy auction. As part of this process, Neverblue will be auctioned off to pay Velo’s debts, and will be bought by the highest bidder.
Judge Martin Glenn of the U.S. Bankruptcy Court in Manhattan signed off Wednesday on Velo’s auction rules and timeline, setting a July 31 auction date for two separate sales: equity in the reorganized Velo and its Neverblue Communications Inc. business.
Velo’s lead lender, Barclays Bank PLC, has offered to set a floor price for both sales, court papers show. It’s offering to forgive $80 million of $385 million in total loan debt for the right to sponsor Velo’s Chapter 11 plan, which would give it ownership of the reorganized Velo. And Barclays has offered to forgive another $20 million in debt for Neverblue, Velo’s lead-generation business.
Under the auction rules Glenn approved, interested bidders must submit their offers for either business unit by July 27. Bids must be in cash and equal or exceed the amount of Barclays‘s debt forgiveness.
Velo said it would notify bidders by July 29 whether their offers meet its qualifications to participate in the July 31 auction.
As part of any bankruptcy auction, the new owner is not required to pay the debts of the company and can buy the company only for its assets, not necessarily its debs. The court can easily approve, and usually does approve the sale of the assets “free and clear” of all liens and liabilities. This means that in theory, affiliates and publishers could not be paid. However, Neverblue issued the following statement that they believed that this sale would not affect the the company, and that they believe that whomever bought it would buy the debts also.
As one of our partners, we wanted to provide you with a brief update regarding the Chapter 11 process of our parent company, V2V Holdings LLC. As our parent company noted in its initial filings, its Board of Directors and senior lenders are considering a potential sale of Neverblue Email (formerly known as AKMG) and Neverblue. In the next few days you will receive a legal notification that outlines the bidding procedures for the sale of the Neverblue companies. As a result of this process, Neverblue will be sold to either the lenders (including General Electric Capital Corporation and Goldentree Asset Management) or a strategic or financial acquirer. I want to assure you that it will not impact Neverblue Email’s ability to meet your needs in any way. We believe that both our lenders and any potential acquirer would be highly committed to ensuring that the Neverblue companies can fulfill their potential and continue to offer the same great service clients have come to expect.
Our business is performing well and we continue to operate business as usual without interruption. We value our relationship with you and look forward to continuing to work with you for many years to come.
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